A shopping mall in Côte d’Ivoire. While malls like this appeal to the upper middle class and the upper classes, several supermarkets and stores are beginning to targeting the middle class. Credit: Marc-André Boisvert/IPS

By Marc-Andre Boisvert
ABIDJAN, Mar 27 2014 (IPS)

“I’m middle class. Definitively,” Sonia Anoh, a young and independent 30-year-old Ivorian tells IPS. Anoh has a master’s degree, earns 1,470 dollars a month working in marketing, lives alone, owns a car and is now shopping for a home. 

But while Anoh freely talks about her economic status, not many others brag so easily about being middle class in this West African nation.

Defining the African “middle class” is a challenge. For the World Bank, it comprises everyone who earns between two and 20 dollars per day. It’s a range that is far too broad and while the African Development Bank uses the same income range, it emphasises the need to subdivide the middle class into two.The middle class here has become a more diverse, complex grouping that is not necessarily just comprised of civil servants anymore.

The upper middle class, by this definition, earns between 10 and 20 dollars a day, and a vulnerable lower class is one that earns between two and four dollars a day. The latter are just marginally above the poverty line of 1.5 dollars a day and can easily slip back into it.

Côte d’Ivoire used to have the strongest middle class in West Africa until it was seriously hit by the post-1980 economic meltdown and the recent post-electoral political crisis from 2010 to 2011. More than 3,000 people died in the violence that followed former Ivorian president Laurent Gbagbo’s refusal to concede victory to current President Allassane Ouattara. Now the Ivorian middle class represents over two million of this country’s 23 million inhabitants, according to government figures.

While Côte d’Ivoire’s middle class may have shrunk, there are signs that this economic group appears to be slowly starting to increase. But its expansion remains limited by two decades of economic problems and conflict.

According to the Moscow-based Institute for Emerging Market Studies, the African middle class will rise three times from 32 million in 2009 to 107 million by 2030 — the largest increase in the world. And with the World Bank predicting that Côte d’Ivoire’s economy will grow at a rate of 8.2 percent for 2014, there is hope that this boom will lift many more of the country’s people out of poverty.

Growing or disappearing?

“Building a strong middle class was an important preoccupation for former president Félix Houphouet-Boigny (1905-1993),” Professor Marcel Benie Kouadio, economist and dean at the Abidjan Private University Faculty tells IPS.

“At the time, [middle class] meant mostly civil servants, doctors, magistrates and other liberal workers.

“Houphouet-Boigny [implemented] several policies to transform a middle class dependent on the state into an entrepreneur class. The state fostered the middle class to invest in cocoa or palm oil plantations as a way to build a middle class that would also be able to produce goods.”

The Felix Houphouet-Boigny stadium and the surrounding buildings in downtown Abidjan were built during his presidency when Côte d’Ivoire was a West African economic miracle that favoured the emergence of a middle class. Credit: Marc-André Boisvert/IPS

Jean Coffie is a retired civil servant and an example of what Houphouet-Boigny dreamt of for the middle class. He is an entrepreneur who lives off his investments.

“My pension is not enough to live on. But I invested in hevea [rubber trees]. Income is random but I still earn more with that than from my government pension,” he tells IPS.

With this extra money, he is helping pay for his grandson’s studies in France. But Coffie is quick to point out that life for a middle class Ivorian is not what it used to be.

“At the time [during Houphouet-Boigny’s presidency], we had a lot of support to develop ourselves. University [education] and health care were more accessible. We might still be middle class but we lost all our privileges.”

Benie Kouadio agrees.

“The middle class has shrunk. Twenty years ago, teachers and doctors were middle class. Now, they can’t afford a new car. The Ivorian middle class lost its purchase power.”

A consumer class 

Purchase power is a key word. Accountants differ with economists in their understanding of the middle class; rather than analysing income, they look at disposable revenue.

Being middle class is about hitting a “sweet spot”, where people are able to spend money for things other than survival, says a report from accounting firm Ernst & Young.

Marcel Anné is the managing director of the supermarket chain Jour de Marché, which is situated in downtown Abidjan, the country’s economic capital. He has a good view of the emerging consumer class.

“Actually, this supermarket is less crowded than it used to be but this is more about changing consumer habits. This used to be [a] central [spot] for the middle class. Civil servants would buy things here and then go home,” he tells IPS.

The middle class here has become a more diverse, complex grouping that is not necessarily just comprised of civil servants anymore. The privatisation of companies, the need for qualified labour work in IT and on the new oil and gas fields have diversified this economic grouping.

So now Jour de Marché has opened “more, smaller supermarkets where the middle class live.”

And around Abidjan, the housing boom too suggests that there is a rising middle class.

Riviera Palmeraie, a former plantation where palm oil trees were cut down to make space for several small bungalows, has been one of the first major housing developments in Abidjan based on affordable units.

And now similar developments are slowly spreading across the city and beyond.

Ousmane Bah is the director of Alliance Cote d’Ivoire, one of the companies building middle class housing. His company will build the Akwaba Residence, one of many housing developments being constructed along Abidjan’s outskirts. Prices for homes start at 21,000 dollars for a two-room home and 36,100 dollars for four rooms.

“It targets mostly the young professionals starting up in life, as well as civil servants,” he tells IPS.

His project, like several others, is supported by the government and is part of an initiative to boost social housing for the middle class.

The government targets households with a revenue of less than 840 dollars per month. Buyers only need to provide a 10 percent cash deposit, and then benefit from a government-backed loan with low interest rates of 5.5 percent.

It addresses a difficult problem that seriously limits the growth of the Ivorian middle class: lack of credit.

“People are not used to buying flats here. They rent. Credit institutions are not used to provide housing loans. This is a big issue. We cannot simply build and expect people to buy,” says Bah.

Mohamed Diabaté is the first to agree.

“This is ridiculous. I wanted to get a credit for my house. It was easier to get credit to buy a goat for a Muslim holiday than having a real sustainable project. They did not even look at my file,” the 40-year-old IT specialist tells IPS.

He says even though he has a “comfortable revenue” and a steady job for 12 years, he could not obtain a home loan.

Benie Kouadio points out that “this is a clear limitation to the growth of the middle class. The middle class has no access to credit. Banks do not give loans for housing or cars any more.”

Children of a generation that fought for basic rights like having enough to eat, learning to read and being treated in safer hospitals, the over 300,000 students protesting on the streets of Brazil want more from a democratic and economic system that no longer represents them and is beginning to show its limitations. Credit: Fabiana Frayssinet/IPS

By Thalif Deen
UNITED NATIONS, Jul 17 2013 (IPS)

The rise of the “global middle class” is widely attributed to the gradual eradication of extreme poverty in the developing world, even as the United Nations says that millions of people in countries such as India, China and Brazil have graduated from the ranks of the indigent.

But is there unintended negative fallout indirectly linking poverty alleviation to the current rise in middle class street protests in Brazil, Turkey, Tunisia and Egypt, among others?

Praising Latin America for its success in “lifting millions out of poverty”, Helen Clark, the administrator of the U.N. Development Programme (UNDP), said last week that “protests and events around the world remind us that citizens want a greater say in the decisions which impact on their lives.”

And U.N. Assistant Secretary-General Heraldo Munoz points out that “many of the street protests in Latin America are sparked by a new middle class, increasingly indebted, who aspire for more, and demand quality public services and decent treatment.”

The challenge is to enhance institutions so they can respond to a new high-level intensity, says Munoz, who is also UNDP’s director of Latin America.

The UNDP estimates that more than 80 percent of the world’s middle class will be living in developing countries by 2030. According to the European Union Institute of Security Studies, the estimated size of the global middle class by 2030 will be about 4.9 billion, up from 1.8 billion in 2009.

In an article in the Wall Street Journal last month, Francis Fukuyama, a senior fellow at Stanford University’s Freeman Spogli Institute of International Studies, says in Turkey and Brazil, as in Tunisia and Egypt before them, political protest has been led not by the poor but by young people with higher-than-average levels of education and income.

“The new middle class is not just a challenge for authoritarian regimes or new democracies. No established democracy should believe it can rest on its laurels simply because it holds elections and has leaders who do well in opinion polls,” says Fukuyama, author of ‘the Origins of Political Order: From Prehuman Times to the French Revolution.’

And corporations are salivating at the prospect of this emerging middle class because it represents a vast pool of new consumers, he notes.

Dean Baker, co-director of the Washington-based Center for Economic and Policy Research, told IPS, “I wouldn’t claim to be a great expert on this, but I would expect that as societies become richer and populations more educated, there will be increased demand for democracy.

“I’m sure that is part of what we are seeing in Brazil, Turkey, and Egypt, but in each case I am sure the nature of the discontent is more complicated.”

In any case, he said, an increased democratisation of society goes along with greater wealth.

In Brazil, the recent protests were directed at the rising cost of living (including an increase in bus fares), high-level political corruption and extravagant spending on next year’s World Cup soccer tournament, estimated at more than 13 billion dollars compared to the deteriorating state of schools and hospitals in poor neighbourhoods.

The protests have been described as “the awakening of the new middle class” emerging out of poverty.

Richard Jolly, honorary professor and research associate at the Institute of Development Studies at the University of Sussex, told IPS, “It’s certainly an interesting theme though one to be written about with many question marks, rather than dogmatic certainties.

“I hope you will also consider some reference to the recent rise of ‘assertive religion’ – meaning fundamentalist versions of Christianity and Judaism, as well as Islam, which Emanuel de Kadt has just published a book about, with the same name.

“I think also of a book written decades ago which argued that revolution starts not when the poor are ground down in poverty but after some improvements in living standards which stirs hopes and demands for something more,” said Jolly, a former assistant secretary-general at the U.N. children’s agency UNICEF.

Dr. Yilmaz Akyuz, chief economist at the Geneva-based South Centre, however, remains sceptical.

“I find the rise of the global middle class story not very convincing,” he said.

Akyuz said it is closely linked to the “rise of the South” story – “something I questioned in various papers I have written since 2010 (see e.g. The Staggering Rise of the South? or Waving or Drowning: Developing Countries After the Financial Crisis)”.

It is now increasingly understood that this is a myth, said Akyuz, a former director and chief economist at the U.N. Conference on Trade and Development (UNCTAD).

He pointed to two developments: declines in poverty and increased income and wealth inequality. “But these two do not give us bigger middle class,” he argued. “Bringing the poor above the poverty line would not make them middle class (as conventionally defined).”

This, together with greater inequality would produce hollowing out since the top would be gaining at the expense of the middle class.

Middle classes in the South are increasingly internationalised in vision and better informed through access to the internet, social media, etc. This is why Turkish Prime Minister Recep Tayyip Erdogan called social media a menace, he said.

At the same time, governments in countries heavily dependent on foreign capital and vulnerable to financial instability are well aware that increased political instability could lead to capital flight and economic collapse, Akyuz said.

“This exerts a restraining influence on them against rioters. Turkey cannot become an Iran or even Malaysia because, inter alia, it lacks natural resources,” he noted. “If middles classes run away with their money, the economy could collapse.”

Ugandans in the VIP seating area at a recent Sean Kingston concert. Credit: Will Boase/IPS

By Fred Ojambo
KAMPALA, Dec 26 2012 (IPS)

Rising investments in Africa’s service sector, the unlocking of its vast natural resources and the sound economic policies pursued by African countries in the last two decades are spurring the rise of the continent’s middle class at a faster rate than population growth.

Investments in the key areas of banking, telecommunications, information technology, transport, tourism, housing and real estate have lifted the continent’s middle class, Lawrence Bategeka, a principal researcher at the Ugandan-based Economic Policy Research Center, told IPS.

“Liberalisation of African economies resulted in improved efficiencies and saw rapid growth in the service sector. Private sector-led growth has resulted in the growth of the middle class on the continent,” he said.

The African middle class is characterised by a per capita daily consumption of two to 20 dollars, although this class has a high concentration at the lower end of consumption, according to an African Development Bank (AfDB) report titled “The Middle of the Pyramid”.

According to the AfDB, by 2010 Africa’s middle class had risen to an estimated 34 percent of the continent’s population or nearly 350 million people – up from about 126 million or 27 percent in 1980.

“This represents a growth rate of 3.1 percent in the middle class population over the period 1980 to 2000, compared with a growth rate of 2.6 percent in the continent’s overall population over the same period,” the AfDB report said.

The middle class is widely acknowledged to be Africa’s future, the group that is crucial to the continent’s economic and political development. But it is difficult to determine exactly who falls into this key group and even harder still to accurately establish how many middle-class people there are in Africa, according to the AfDB.

In Uganda, being middle class is determined by having a good education, being able to rent or own a good home, having access to the internet, making frequent visits to a supermarket and spending the equivalent of 15 dollars a day, Stephen Kaboyo, the managing partner of Uganda-based research company Alpha Partners, told IPS.

Joseph Nsubuga, a land dealer near Kampala, the Uganda capital, saw an opportunity to be part of the rising middle class and grabbed it.

“Rising incomes for many people in the country sparked off demand for land where I saw an opportunity to advance my own fortunes. I started by selling what I inherited from my parents but it is now my fulltime job to buy and sell land. My fortunes have improved and I am able to send my children to good schools,” Nsubuga told IPS.

James Babalanda, a Kampala-based educationist, also saw an opportunity to improve his quality of life. “Since people with increased incomes wanted good electronic equipment, I decided to open a number of shops dealing in these items in the capital and, believe me, I am living a fairly good life. My business is ever growing because of a ready market,” he told IPS.

Bategeka said that room for further growth of Africa’s middle class abounds,but is dependent on increased government investment in infrastructure.

“Uganda is a good example of how economic reforms are enhancing people’s incomes, and this growth would have been higher if investments in infrastructure were higher. Most countries have been slow in providing faster private growth because of deficits in infrastructure, which is key to growth,” Bategeka said.

By ditching state controls and embracing private sector-led policies, African economies stimulated the growth of the middle class, and there is room for further expansion with more public sector investments in infrastructure projects, Bategeka said.

In the 1990s African economies embraced the World Bank and the International Monetary Fund’s (IMF) structural adjustment programmes, which advocated free market policies.

“The introduction of liberalisation, which focused on private sector-led growth, is key to the growing middle class on the continent,” said Bategeka. “Countries introduced sound economic policies which controlled inflation, benefiting investments in their economies.”

“Investments in the service sector are some of the drivers of middle class growth on the continent. The sound macroeconomic policies at the same time attracted foreign direct investments which helped to grow the middle class,” he said.

North African countries have a higher concentration of middle class society, with Tunisia having the highest proportion at 89.5 percent, followed by Morocco with 84.6 percent.

Liberia has the lowest concentration of middle class among the countries surveyed, with only 4.8 percent of the population falling into this category, followed by Burundi at 5.3 percent.

“Africa’s middle class is a key source for private sector growth in Africa, accounting for much of the effective demand for goods and services supplied by the private sector,” according to the AfDB.

Sub-Saharan Africa remains insulated from the negative factors affecting growth in developed countries and the economic activity in the region is generally robust with growth in 2012-2013 expected to remain the same as it was a year earlier, the IMF said in its October 2012 regional outlook for sub-Saharan Africa.