Africa's growing middle class drives prosperity
Sub-Saharan Africa's rising population and economies have led to a growing middle class and, in turn, more spending power which provides "a vast source of potential for prosperity," per experts at the African Development Bank.
The big picture: Since 2000, the wealth of sub-Saharan African nations has been growing much faster than the global average and than that of the more prosperous Northern African nations. And in the next five years, analysts at the International Monetary Fund expect the region's GDP to expand even faster.
- Africa's population has grown to 1 billion since 2010, and the continent's middle class has grown to 350 million, according to an African Development Bank estimate.
- Private consumption has risen an average of 3.7% year-to-year since 2010, and that growth is expected to hold in 2018. It has been the most significant factor in the GDP growth of sub-Saharan Africa since the beginning of the century.
- Consumer spending accounts for 50–60% of the growth of Africa's economy, with the second more impactful factor being investment in infrastructure.
- As the population keeps growing, consumer spending is projected to rise from $680 billion in 2008 to $2.2 trillion by 2030.
Yes, but: The middle class is driving growth, but 645 million Africans still live without access to electricity and the lack of infrastructure has the potential to slow growth. Still, governments are ramping up spending on infrastructure, the African Development Bank notes. Per their analysis, public spending on infrastructure grew by 3% of GDP in 2014, and that growth is expected to stay constant for the next five years.