Consumer revolution is underway in East Africa

Posted on August 25, 2015 12:01 am

A comprehensive new report outlining the unrivalled and incredible potential of Africa’s most promising region, East Africa’s expanding consumer class has noted that the number of people recognised or classified as middle income in the region will grow to 100 million by 2030.Western World researchers in the region have extensively documented that the bloc’s demographic dividend and rising per capita income present a once in a generation opportunity for the East African countries to lift themselves up by the boot straps.If these optimistic projections pan out, Uganda, Tanzania, Kenya, Rwanda and Burundi will join the ranks of developed economies in the not too distant future with Kenya expected to be a upper middle income country ten years before the rest by 2030. The report cites the increase in the middle class is Kenya, Uganda and Tanzania is unprecedented and expected to present a huge opportunity for businesses to utilise immediately.Having lived in the region, I can confidently say growth is not about linear growth anymore and has shown that through a take off point for many goods and products and there is need to empower private business by reducing the burden of bureaucracy. Optimistic and well researched predictions are encouraging for East African region that has long been the laggard among the four major regions of Africa.It is unfortunate that Africa still remains the poorest yet the wealthiest mineral and natural resources rich continent in the world and have created a heady feeling among policy makers and corporate chiefs in a region with an estimated population of 140 million people.

However, before the policy makers in Arusha, the headquarters of East African Community member states and proponents of such findings get carried away with the euphoria and get caught in the hype, they should be aware that such an outcome is by no means certain and it presents the bureaucrats and technocrats with an opportunity to verify the finding.If indeed the five countries are to create a 100 million strong middle income market, much work lies ahead starting with free movement of goods and services, free movement of goods and people and most important eliminating the red tape hindering the business growth in the region. I think that the East African region’s consumer companies need to adjust their strategies to meet the aspirations of this new class of consumers. Just like they do in Australia and Scandinavian countries, Kenya, Uganda, Tanzania, Burundi and Rwanda need to invest heavily in Research and Development. Also governments should support innovation so as to develop new products and services that suits the regional market. If it were Contador Harrison wishes, the governments in East African would have recalibrate their budgets, shift spending from valueless projects to improving and building valuable infrastructures like roads, rails, renewable energies, water and sewerage systems, improve education systems and close graft taps. There is no doubt a consumer revolution is underway in East Africa but it won’t succeed without government and the private sector involvement.

Contador Harrison