Chief Executive Officer of the Standard Bank Group, Mr. Sim Tshabalala
Nigeria’s middle class has risen by 600% in 14 years
As the US-African leaders’ summit continues in Washington DC, United States of America, Africa’s largest bank by assets and earnings—Standard Bank Group, has said the continent offers American multinationals a compelling trade and investment opportunity due to the rapid and pervading economic growth rates, complimented by a burgeoning population growth and increasing urbanisation.
The Chief Executive Officer of the Standard Bank Group, Mr. Sim Tshabalala, said the US’ plan to revitalise its commercial and trade links with Africa could not have come at a more opportune time, as trade with African economies and investment in the continent offer big rewards but requires sound local knowledge, strong local partnerships, and a long-term view.
He churned out statistics to underscore why investment drive in Africa by American multinationals remained imperative.
For instance, he said Nigeria’s middle class has swelled by 600 per cent since year 2000, with the country accounting for about 4.1 million middle-class households, representing 11 per cent of the total population.
According to him, "Other economies doing particularly well on this measure include Angola, where 21 per cent of households are considered middle class followed by Sudan (14 per cent) and Zambia (10 per cent)."
He said, economic growth in sub-Saharan Africa had exceeded five per cent a year for over a decade now, giving the continent a 4.1 per cent share of global gross domestic product (GDP), up from 3.4 per cent in 2000, adding that by 2050, one in four of the world’s population will reside in Africa with at least 60 per cent of the continent’s people living in urban centres.
He declared in a statement issued on behalf of the bank by the African Press Organisation (APO) that Foreign Direct Investment (FDI) into Africa has increased dramatically in the last decade and a half, and continues to grow.
“In 2013, FDI to Africa increased by 9.6 per cent to an estimated $56.6 billion, representing 5.7 per cent of global FDI. FDI is forecast to exceed $60 billion in 2014. Total foreign inflows to the continent reached $186 billion in 2013, and are expected to top $200 billion in 2014,” Tshabalala said, adding that emerging economies - and the BRICS (Brazil, Russia, India, China and South Africa) in particular – are seizing the African opportunity.
“In 1992, China, India and Brazil accounted for just three per cent of Africa’s global trade compared to 25 per cent today. A wide range of firms from India, Brazil and South Africa are also expanding quickly in Africa, often with strong support from their governments.
“Yet, while the US may be arriving late to this party, the world’s biggest economy still offers unrivalled commercial and industrial excellence in many key fields. The vibrancy of US multinationals, with their proven track records, industrial processes, established retail networks and brands are of immense attraction to the ongoing consumer revolution taking place across Africa,” he said.
“Africa has come a very long way from its era of aid-dependence. The rapidly emerging middle class in Africa is driving large-scale diversification of Africa’s economies which offers immense opportunities for companies willing to invest,” he said.
He pointed out that in Nigeria, the middle class had swelled by 600 per cent since the year 2000, with the country hosting 4.1 million middle-class households, accounting for 11 per cent of the total population.
The number of mobile phone users in Africa has also multiplied 33 times since 2000 and is likely that almost every adult African will have a mobile phone in the next five years,