Africa’s middle class critical to democratic & economic progress - CNBC Africa

Africa’s middle class critical to democratic & economic progress

Special Report

by Trust Matsilele 0

Africa’s middle class critical for democracy and economic progress. PHOTOS: Varsity View/staticflickr

Professor Mthuli Ncube in an exclusive interview with CNBC said the middle class played many varied roles in the society.

Mthuli Ncube made these revelations in his new book, The making of the middle class in Africa: evidence from DHS data. 

“The middle class does many things as it can be a source of economic progress through consumption,” added Ncube, a research fellow at Oxford University’s Blavatnik School of Governance.

“The middle class demands better services from the government and other service providers so it can be used as a conduit to improve the quality of service delivery,” he added.

On the democratic processes and political economy, Ncube said the middle class of the 1960s was educated and to an extent contributed to Africa’s liberation struggle beginning with Ghana’s Kwame Nkrumah.

Ncube in his book argues that people get into the middle class due to education as it was a critical tool for getting one into this social class and staying there.

(READ MORE: Africa’s middle class well educated)

“The more educated people are the more likely that they will get into the middle class, stay there and not fall out,” he said.

Ncube said his study also demonstrated the middle class as contributing to job creation through entrepreneurship.

The former vice president of the Africa Development Bank and chief economist said a stable government tended to foster the growth of the middle class adding that this was aided by mutual trust and predictability

Ncube warned that inequality was bad for the growth of the middle class noting that South Africa had done a lot to ensure progress in redressing inequality.

“There are three groups of middle class we categorised in the book, Africa’s emerging middle class. These include the floating, the lower middle class and the upper middle class,” said Ncube.

“The floating is composed of people consuming two to four US dollars per day and this comprise about 180 million people in the continent,” he added.

He warned that there was need to explore mechanisms of keeping floating middle class in that bracket as they ran the risk of sliding back into poverty.

Ncube urged governments to address unemployment challenges through interventions such infrastructural development and speeding connecting regional connections.

“One billion people will be added into the region’s population by 2050 and obviously half of that will be youth which presents the challenge of youth unemployment,” he said.

He urged countries to use minerals to improve sectors such as human development through vocational training, infrastructure and creating sovereign wealth fund.

Ncube said diversification in regional economies and creation of cluster industries such as in supply, cleaning, catering and transport was critical going forward adding that South Africa presented a positive example.

He further warned that resource dependence in the region adding that oil producing countries will feel the pinch if the price of oil barrel falls below 80 US dollars.  

(WATCH VIDEO: The impact of tax evasion on African economies)

“Nigeria has done very well in the last 10 years by diversifying into the agriculture sector. Agriculture and services has overtaken the mining sector even though the sectors have received far less credit than deserving,” he said.

Ncube also called on regional economies to address illicit financial outflows.

“The continent loses about 50 billion US dollars through illicit outflows and this is the same amount the region gets through aid and foreign direct investment,” said Ncube.

He said there was a need to address issues like corruption and tax avoidance.