According to the Africa’s 40 Richest list published by Forbes on 19 November 2012, there are now 16 billionaires in Africa. In an article in Bloomberg two months ago, it was claimed by Mark Mobius, executive chairman of Templeton Emerging Markets Group, that there may be as many as 200 “hidden” billionaires in Africa. Furthermore, the World Wealth Report produced by Merrill Lynch and Capgemini, South Africa says that the year on year increase in African millionaires was set at 13.3%.
Whatever the figures, there is no doubt that there is money in Africa and plenty of it. So much so in fact that it is completely altering the way Africans view wealth and lifestyle. South Africa’s Black Economic Empowerment (BEE) programme which began at the end of the apartheid in 1994 has helped to create a new generation of middle-class individuals. This growth isn’t restricted to South Africa however, the youth workforce demographic, raw materials, maturing political infrastructures and abundant natural resources across the African continent are all fuelling the gold-rush climate.
One generation previous, a typical African woman would have a low income, a large family and very little accommodation for expenses beyond basic means. Her children though are much more likely to be well-educated, independent professionals with a taste for Jimmy Choo shoes and Hermes handbags. Joel Kibazo, a consultant working with Oxford’s Centre for the Study of African Economies, says the signs of an emerging middle class are encouraging: “If you look at my country, Uganda: when I was growing up, there was one university, now there are about 30. All these people who are educated are coming out wanting a middle-class lifestyle. They don’t want to go back to villages and mud huts; they want to buy microwaves and laptops.”
Other contributing factors include the expanding labour force. It has long been touted that a large contingent of the working world is key to mass GDP growth and with 500 million in Africa, there is a good chance that they could outstrip India and China in years to come. Such an increase would also create urbanisation leading to an upturn in consumption, more demand for local products and a cycle of domestic growth.
In a presentation headed ‘The Meaning of Luxury in South Africa’, Dr Crosswaite identified four types of luxury consumers in Africa, each with a unique relationship towards ‘status’. On one end of the spectrum, there are materialistic and demanding extroverts who use luxury as a way to display wealth and benchmark personal success. On the other end are the experts who have a genuine appreciation of beautifully crafted goods.
- The ‘money aristocracy’ who are familiar with and are confident with navigating luxury. They are aware of their status and being part of the establishment but are not ostentatious in their consumption.
- The ‘established business magnate’ values uniqueness and limited-edition objects as a connoisseur rather than a flamboyant consumer.
- The ‘new money’ or ‘nouveau riche’ has a very different experience and understanding of luxury. They are eager to learn what it means to be associated with money. Brands help them to attain the desired sense of self, of individualism, as well as accomplishment and ‘having made it’ with an outward status.
- The ‘deluxe aspirer’, someone from the growing population of wealthy upper-middle class individual’s en route to entering the world of luxury. These are often South African politicians or self-made people of means with limited education but with enormous drive, a high need for distinction and a ‘go-getter’ mentality. They buy luxury premium goods to show off their success. In fact, if their peers don’t recognise the value of their possessions, their money has been wasted. For them, status skills are less important, as it is all about ‘show-time’.