8 June 2011

Kenya: Middle Class Consumers Defy Hard Economic Times

Nairobi — While the working poor are nervously watching the rise in cost of living, the other half is living a life of lavish consumption.

Mr Ezekiel Onyango, 28, lives in Nairobi's Kilimani estate with his girlfriend, where rent ranges from Sh60,000 to Sh80,000 a month.

Mr Onyango is a film director and producer, and runs his own production company. He also hires out tour vans and cars.

"Over the weekend, I hang out mostly at Casablanca in Kilimani, or Galileo's in Westlands," he says.

He drives a Toyota Prado VX, and spends between Sh22,000 and Sh35,000 a month on fuel.

Ezekiel does his household shopping at Nakumatt Supermarket, and likes to travel during the holidays.

Ms Scola Mworia, 29, also works in the TV/film industry, as a video editor. She is single, and lives in Nairobi West.

She likes to attend outdoor events and is a big fan of live bands and karaoke.

"I hang out at Psys in Lang'ata, especially on Thursdays when my favourite band plays," she says.

Ms Mworia doesn't have a car, but spends an average of Sh8,000 on taxis in a month. She does her household shopping at Tuskys or Uchumi supermarkets.

Construction boom

Mr Onyango and Ms Mworia are prototypes of Kenya's emerging middle class, which has driven up consumption and changed the face of the city by precipitating a construction boom of shopping malls, coffee shops and residential apartment blocks.

Experts assert that long term economic growth in the region is inexorably linked to the rise of the middle class consumer.

This section of the population is typically young, shops in bulk at one of the many supermarket chains, drives a personal vehicle or prefers to use a taxi, goes to a bar or club over the weekend and frequently outdoor events.

A recent report by the African Development Bank (AfDB) indicated that Africa's middle class has grown to 313 million from 111 million two decades ago.

Four per cent, or 43.6 million, of them spend more than $20 (Sh1,680) a day.

Global management consulting firm McKinsey & Company reports that from 2005 to 2008, consumer spending in the continent increased at an annual rate of 16 per cent, more than twice the GDP growth rate.

According to AfDB, members of Africa's growing middle class are better educated than their poor counterparts and tend to have salaried jobs or small businesses.

The report indicates that 1.6 per cent of Kenya's population spends over $5,000 (Sh420,000) a year, the level at which households begin to spend more than half of their income on items other than food.

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