The South Africa stationed Standard Bank study this week named 11 African nations topping in middle-class status in Africa, with Ethiopia included among the well-performing states.
According to the Standard Bank's latest study, Ethiopia, together with ten other African nations, is said to be home to millions of middle-class households and that the trend will keep increasing in the next 15 years. Simon Freemantle, the author of the report, told the African Press Organization (APO) that the report has been conducted on the basis of the South African Living Standards Measure (LSM). Previously, 300 million people were said to constitute the middle-income societies of Africa. That number has dwindled to 22 million.
In its "Understanding Africa's Middle Class," the Standard Bank listed Angola, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Sudan, Sudan, Tanzania, Uganda and Zambia as prospective countries that would have millions of households as middle-income earning societies in Africa. Previously, the African Development Bank (AfDB) reported in its "middle of the pyramid: Dynamics of the middle class in Africa" in 2011 that the middle class were those individuals who could earn USD 4 to 20 a day. In addition, those individuals earning USD 2 to USD 4 are also counted in the middle-income earners category. The Standard Bank, however, scrutinized such categorizations of one-third of the African population, precisely over 300 million, as a mere aggregation where such individuals remain vulnerable to "economic shocks and prone to lose their middle-income status," Freemantle said.
The previous estimates of middle-income Africa were argued to be a reflection of the "knowledge gap" and hence, based on the LSM methodology, 11 states were labeled home to 14 million additional middle-income households. That said, the author cautions that out of the 110 million people of the 11 states, 86 percent are under-achievers of the middle class. "Though there has been a meaningful individual lift in income, it is clear that a substantial majority of individuals in most countries we looked at still live on or below the poverty line (measured as those with a daily income of USD 2 or less)." Hence, individual-based analysis is a non-quantifiable measurement. Either way, the middle class in Africa has been rising since 1900, the report stated.
Yet, these countries were able to swell in Gross Domestic Products (GDP) tenfold increase since 2000. In a related case, the FDI report 2014 dubbed The Global Greenfield Investment Trends, issued by the FDI Intelligence magazine, named Ethiopia as one of the top ten foreign direct investment destination countries in the Middle East and Africa in 2013. Ethiopia amassed USD 4.5 billion in the stated year and stood eighth before Algeria and Kenya.
The Standard Bank is one of the oldest financial institutions in the continent, some 150 years old and currently employs some 49 thousand people across the region. In the 2013 fiscal year, Standard Bank registered revenue of USD 1.8 billion.