NGAHU: Africa’s expanding middle class presents opportunities and risks

Last week I attended the annual Marketing and Social Research Association’s (MSRA)onvention held at the Southern Sun Hotel in Nairobi. The theme of the convention was: Africa Middle Class – Myth or Reality.

Unlike past conferences where there was consensus among the attendees this year’s eveny was quite controversial. As I listened to the speakers it appeared that people like the Saturday Nation columnist Njoki Chege were present to explain some middle class phenomena, especially in relation to Subaru drivers.

Most speakers during the morning session seemed to agree on the existence of a thriving middle class in Africa. Eric Achola of Safaricom kicked off the session with an optimistic view that the middle class is a real business opportunity.

Anna Othoro, the Nairobi County Trade and Tourism minister, explained that the 1973 city master plan had not anticipated the current middle class population. This means that the water and infrastructural needs of the city are currently overstretched.

She narrated how the new 25-year master plan developed in conjunction with the Japan International Cooperation Agency (JICA) is aimed at addressing the city’s needs. She also explained that some planned 100,000 residential houses will be built in the next five years under owner occupier programme to contribute in improving living standards of the middle class.

Currently the city is carrying out a census of vehicles to inform traffic decongestion initiatives.

Ms Othoro implied that red tape in procurement poses a challenge in delivering essential services. The recently planted grass, for example, had been procured 11 months before President Barack Obama’s visit.

Many researchers presented papers displaying evidence of a burgeoning middle class. This includes the massive malls being put up, international brands entering the market, real estate boom, traffic jams, increase in domestic travel, entertainment joints, theme nights and flashy.

There were also behavioural trends like a large number of Kenyans on Twitter, choosing to live in specific areas, conspicuous consumption and educating children in certain schools.

Joy Uyanwune from Nigeria explained similar trends in West Africa, though these were more elaborate due to Nigerians’ tendency of creating impressions and arriving in style. She also observed Western influence on behaviour, with the example of some men in West Africa opting to be called Caitlyn.

She challenged researchers to be to be at the fore front helping investors to understand the needs and complexities of the African market.

As the day progressed dissenting voices continued increasing, with Michael Riungu, the research and development manager at the Kenya Tourism Board, presenting the travel trends of Africa’s middle class the numbers were not impressive. Mr Riungu made a call for all Kenyans to own and drive the Magical Kenya brand.

The business development manager of Naivas, Willy Kimani, presented a rather pessimistic picture of the middle class.

He described how sales of lifestyle items such as electronics and furniture in the supermarket have been growing annually by more than 50 per cent but was cautious that some of the upcoming malls are larger than the catchment areas, confirming my worst fears that the modern retail bubble is bursting.

The writer is the marketing director of SBO Research. E-mail: bngahu@sboresearch.co.ke, Twitter @bngahu