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Ventures Africa | Africa’s Middle Class To Maintain Explosive Growth (
VENTURES AFRICA – Africa’s middle class has experienced substantial
growth over the past 14 years and there are no signs , a study by
Standard Bank, one of South Africa’s largest financial institutions has
“Standard Bank has attempted to fill the knowledge gap by using
comprehensive household income data and adopting our own measure of the
middle class using South Africa’s LSMs as a framework in order to
provide cross-quantifiable reference points for peer African economies,”
Standard Bank senior political economist Simon Freemantle, author of
the report, said.

The Living Standards Measure (LSM) is a proven methodology used in
South Africa to give investors to Africa data on which to base their
investment decisions.
The study focused on 11 economies; Angola, Ethiopia, Ghana, Kenya,
Mozambique, Nigeria, South Sudan, Sudan, Tanzania, Uganda and Zambia.
The report, entitled ‘Understanding Africa’s middle class,’
found there are 15 million middle-class households in 11 of sub-Saharan
Africa’s top economies this year, up from 4.6 million in 2000 and 2.4
million in 1990 – an increase of 230 percent over 14 years.

The report also found that the combined GDPs of the 11 measured economies had grown tenfold since 2000.
86 percent of the focal economies however remain within the broadly
“low income” band despite their economic growth, stressing the nascent
maturation of many of Africa’s markets.
The LSM method used in the new report, though suggests that Africa’s
middle class is smaller than about 300 million believed in the past when
conventional wisdom was used, the report however points out that
investors using an unquantifiable assumption might find individuals they
had thought were middle class were in fact highly vulnerable to lose
that status in any economic shock.

Despite the middle class being smaller than previously thought, the
report expects investors to be comforted by the fact that Africa’s
middle class is growing strongly and Africa’s income accumulation is far
more broad-based than had previously been thought.

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