Laying the foundation for East Africa’s coming middle class

Posted on December 20, 2013 09:55 am

A new report outlining the unrivaled and massive potential of East Africa’s fast expanding consumer class has noted that the number of people recognized or classified as middle income in the region will grow to 100 million by 2025. It is now well documented that the regional bloc’s demographic dividend and rising per capita income present a once in a generation opportunity for the East African Community countries to lift themselves up by the boot straps. If these optimistic projections pan out, East African countries of 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 middle income country ten years before the other four by 2030. The study cites the increase in the middle class is Kenya, Uganda and Tanzania is unprecedented and expected to present a huge opportunity for businesses to utilize immediately. East Africa 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 the region that has long been the laggard among the four major regions of Africa, the poorest yet the wealthiest mineral and natural resources rich continent and have created a heady feeling among policy makers and corporate chiefs in a region with estimated 136 million people.

However, before the policy makers 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 in Arusha Tanzania, the headquarter for East African Community 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. Me 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 and governments should support innovation so as to develop new products and services that suits the regional market. If it were my wishes, the governments in East African must 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 African region but it won’t succeed without government and the private sector involvement.

Contador Harrison