small business

Why Africa's Middle Class Matters

This entrepreneur owns a telecentre in Tanzania and is among the small business owners in the unique position to create change for Africa's poor. Photo: <a href="http://www.flickr.com/photos/iicd/5349103222/lightbox/">IICD (flickr)</a>
This entrepreneur owns a telecentre in Tanzania and is among the small business owners in the unique position to create change for Africa's poor. Photo: IICD (flickr)

They own apartments instead of huts. They exploit technology to organize revolutions. They are Africa’s new middle class — and they are still living on less than $20 a day.

One in three Africans are earning between $2 and $20 a day and considered middle class. According to the Guardian, it is exactly this growing, educated population that is becoming the catalyst for change throughout the developing world.

According to a World Bank study cited by the Guardian, "countries with lower poverty will have a large middle class and see higher subsequent rates of both growth and poverty reduction." The reasons for this are both social and economic, but the growth of Africa's middle class seems to bode well for the continent.

Because the developing world's middle class still lives on less than $20 a day, it shares many of the grievances of those living below the poverty line, explains the Guardian. However, members of this income bracket pay more in taxes and thus are more likely to seek transparency and accountability from those in power. Since members of this narrowly defined middle class are generally business owners rather than government employees, they are unlikely to reap benefits from a corrupt system. Given these circumstances, they are often the ones most effective in lobbying for improved living conditions.

In developing countries, this mid-level income group is also particularly important in the small business sector. They have higher disposable income to invest in domestic economies and in education to produce a skilled workforce. As small business owners and entrepreneurs, they may also have the hiring power to employ new workers in difficult economic times.

Freeing Africa from poverty and corruption will take all these changes and more. But with one in three Africans qualifying as middle class, the continent may be on the right track.

Afghani Business Success Story

Topics: Women
Countries: Afghanistan
Photo: Shirine Bakhat/Mercy Corps
Photo: Shirine Bakhat/Mercy Corps

Today's Christian Science Monitor has a hopeful piece on female entrepreneurs in Afghanistan.

The success of Sediqi and a handful of other Afghan businesswomen come amid difficult circumstances, despite steady growth in the overall economy. In the face of a resurgent Taliban, stagnant reconstruction, and the high-profile kidnappings of foreign aid workers, these women push forward, propelled by entrepreneurial grit and desire to support their families. While no official figures track their numbers, they can be found in pockets of Afghanistan, launching consultancies, furniture factories, and printing houses. Many of them say better business conditions, rather than more talk of their plight, are critical.

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Social responsibility and a new world order

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Just before the New Year, the London-based Center for Economics and Business Research announced that Brazil had overtaken the United Kingdom as the world’s sixth largest economy. Furthermore, it predicted that by 2020, India and Russia will also have overtaken all the European economic powers.

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Ellen Johnson Sirleaf has set ambitious targets to restore the country's electricity supply. But will it meet them by 2015?

As Africa's consumers rise, so does inequality

Yale Global Online - Fri, 02/03/2012 - 10:17
Kenya struggles to spread the wealth from rapid growth.

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