Conspicuous wealth

If the past few months are anything to go by, African governments would be entitled to wonder whether the major European states might now stop lecturing them about poverty reduction, good governance and corruption.

While Europe has been struggling with financial turmoil, debt crises, austerity budgets, rising unemployment and mass protests, countries in the Sub-Saharan region have been enjoying an unprecedented period of social stability and economic growth.

A report published recently by the African Development Bank (AFDB) predicted a GDP growth rate of five percent over the next 50 years in Africa. The bank also forecasts that there will be around one billion middle-class Africans by 2060.

Conspicuous wealth

The situation is of course very different in different African countries, but in some nations the signs are obvious. Thomas Cargill, assistant head of the Africa program at the UK think tank Chatham House, says the view over the Nigerian capital Lagos tells the story well.

"Nigeria has been really significant," Cargill told Deutsche Welle. "If you fly into Lagos now, as far as the eye can see, there are middle-class housing estates that are the equal of anything you see in Europe. The rise of the middle-income middle class has been very, very visible."

Definitions of the middle class differ of course, but for the AFDB, it means people living on between $4 and $20 (3 euros - 15 euros) a day. While that does not compare to European standards, it puts more and more Africans in the unfamiliar position of being able to spend money on things other than food and shelter.

Not just about oil

Researchers now say it is this capacity for consumption that is the single biggest factor in driving growth, replacing the received notion that Africa's natural resources would provide the foundation of its growth.

"There are a lot of assumptions that commodity prices and the price of oil have driven growth in Africa," said Cargill. "It is aided by commodity prices, but it is also related to cheaper consumer products imported from south-east Asia."

The example of Nigeria is particularly telling. "People assume Nigeria is oil rich," points out Cargill. "But if you divide all the oil out equally, it would only be about three barrels per person per year, which is not enough to drive growth."

There is also evidence that the exploitation of natural resources is only happening after middle classes have been established. "It's in the non-oil economies - Uganda, Kenya, Ghana - where we've seen really fast-expanding middle classes," said Cargill. "Uganda has seen some oil strikes, but only now."

Inequality persists

Foreign investment is also rising significantly, as Christian von Soest, researcher at the German Institute for Global and Area Studies (GIGA), can confirm from personal experience. "Companies are beginning to invest in Sub-Saharan Africa under the assumption that things will start happening," he told Deutsche Welle. "Big companies are asking us at the institute which countries could be interesting."

But a rise in a consumer class does not necessarily mean an end to poverty. Far from it. The AFDB report expects the total African population to triple over the next 50 years, leaving millions below the poverty line.

"Poverty is falling proportionally, though it is rising absolutely," said von Soest. "There's a very small class of very rich, but the interesting question is how many from the lowest levels manage to get up higher."

Cargill points out that one African country, South Africa, provides a good model of where the rest of the region seems to be headed. "South Africa is basically a first-world country living on top of a third-world country," he said. "They have very conspicuous consumer spending, conspicuous wealth, but living in gated communities often right alongside slums and deep-seated poverty. That pattern is already starting to spread across Africa."

Political reforms to follow

Part of Africa's economic successes are down to sensible governance. Many governments have brought in reforms that have liberalized trade and reduced bureaucratic barriers. "As far as economic developments go, there have been a lot of improvements," said von Soest. "Lowering inflation, lowering debts, more liberal trade policies. There are also World Bank reports that say that it has become a lot easier to start a small business."

Whether that translates to political freedom, greater social equality and an end to corruption is sheer speculation. But the North African precedent does suggest, at least, that a rise in middle-class power is followed by a demand for democracy and rule of law.

Author: Ben Knight
Editor: Rob Mudge