Play 1: Start a business
Just over 70% of respondents believe in order to live a secure lifestyle, you have to have your own business. And while entrepreneurship is commonly viewed as the obvious vehicle to success, there are some markets – such as Accra, Kano, Luanda, Lusaka and Addis Ababa – where a formal job is still regarded as the best way to climb the ladder.
However, both professional paths face significant barriers, including nepotism, inadequate employment opportunities, low wages, limited or non-existent funding for new ventures, and corporates shutting down and retrenching.
Play 2: Diversify
Of those interviewed for the study, only 37% have formal jobs. This is not surprising as the informal sector accounts for 93% of new jobs.
However, there is a strong focus on income diversification, as 21% of respondents have a side job and 22% are involved in a side business.
Play 3: Financial discipline
Resilience is a key characteristic of the middle class in Africa. Due to financial pressures, they have learnt to carefully monitor their expenditure, pool resources and juggle budgets.
In most markets the middle class is disciplined when it comes to finances and spending. One respondent in Luanda said: “I like to spend according to my plan and usually I just ignore the desire to spend on things not budgeted for.”
The survey found that middle-class Africans plan their spending when it comes to purchasing clothes and entertainment, and they often suppress the desire to impulse spend – except when it comes to luxuries.
But despite this, only 38% have money left at the end of the month.
Play 4: Cementing their middle-class position
In order to cement their position in the middle class, and for a fear of slipping back towards poverty, a large number of respondents seek to minimise financial vulnerability through savings. Some 75% have a savings account, 64% cite savings as another source of income, and 67% have money put aside for emergencies.
Play 5: Expect the unexpected
Nearly 80% of respondents had unexpected expenses in the last year. What the middle class should learn to expect and plan for is: illness, death, repairs to home and car, financially assisting a family member, and unplanned entertainment expenses (such as for a visiting friend or a celebration).