It is ten o’clock on a Friday morning inside an apartment in Morocco’s economic capital, Casablanca, and the smell of couscous permeates every room. “It’s the tradition in Morocco, every Friday we cook this meal and the whole family gathers round the table. It is almost sacred,” explains Mouna Achak, a woman in her forties.
A mother of two who works in the management division of a local company, Mouna balances professional and domestic life as best she can. “It’s what most Moroccan women have to do, especially middle- class women, even more so as home help has become so expensive.”
Mouna has a cleaning lady, whom she pays Dhs100 ($11) a day to work twice a week. On a salary of Dhs4,000, she feels she cannot afford any more. So everyone helps out, including her husband, Si Mohamed. “I have worked for over 20 years,” says Si Mohamed, who runs a small textile factory. “I earn just Dhs8,000 each month, not enough to meet all the expenses we face in this house. And my kids are still small. As they grow older, they grow more expensive!”?
As a result, everything is paid for on credit, “from education to medical bills, holidays, clothes and electrical goods,” says Mouna. The National Planning Commisssion says that 59% of middle-class debt is used for household consumption, while 25% is for housing and 16% is for appliances and travel.
Africa’s middle classes are spending money on phones, housing, education, consumer goods and groceries. Many sectors, from banking to construction, have been boosted by growth in domestic demand over the last decade. Some attribute Africa’s weathering of the global downturn to the resilience created by the development of a consumer-driven middle class.
US management consulting firm McKinsey has calculated that the percentage of African households with discretionary income (calculated as households earning over $5,000 a year) has risen from 35% in 2000 to 43% in 2008. The group predicts that more than half of African households will be in this group by 2020, with consumer spending ?totalling $1.4trn.
The growth of mobile-phone usage may not be an exact proxy for disposable income. Cigarette and beverage manufacturers will testify to this, having seen their markets hit by the poorest of the poor spending money on phone credit instead of smoking and drinking. But other indicators are there – there is a reason why Renault-Nissan chose to locate a huge new factory for its low-cost model, the Logan, in Morocco.
However, it is the services purchased by the middle class, in addition to the goods, that deserve attention because they may help to create the jobs that Africa needs.
The Achak family are preparing to go to the seaside on holiday this year, “though Marrakech is our favourite destination,” says Si Mohamed. Tourism is a labour-intensive industry, as are the growing childcare and ?domestic-work sectors.
“In Morocco, all kinds of sporting, cultural and holiday activities cost money. We don’t have sports and activity centres paid for by the government, which means we have to send our children to private organisations,” he says.
The money that the middle classes push through the system can temper the anger of their left-wing critics who lambast them for not putting enough pressure on failing regimes. The middle classes spread wealth around more than the elite groups, who tend to spend on foreign products, go abroad for their holidays, keep their money in foreign banks and are too few in number to have much of an effect on employment.
But Africa’s middle classes are also fragile. They make up the first mass market targeted by the newly-rejuvenated banks as potential buyers of retail products like car or housing loans. Most families do not have deep reserves. Across Morocco, households like the Achaks pay via deferred-payment schemes and with postdated cheques. “Sometimes at the beginning of the month, there is nothing left of my pay cheque as the payments I have to make take it all. I have to borrow left and right to make ends meet. It’s a vicious circle and we can’t get out of it”, says Mouna.
This has happened before. In South Africa, former President Thabo Mbeki chose to create a middle class by increasing the number of blacks in the civil service, with some success. But in 2008, South African financing company Wesbank faced serious problems when over-indebted consumers were unable to meet payments on their cars. If South Africa’s middle class had this problem yesterday, and Morocco’s is facing it today, will Kenya’s middle class be feeling it next?
This article was first published in the August-September 2010 of The Africa Report.
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