Africa has the youngest and fastest-growing population, which could reach 2.5 billion by 2050. That population boom has the potential to unlock more than $3 trillion in consumer spending, according to a new report by the McKinsey Global Institute (MGI). Senior partners and MGI directors Olivia White, Jonathan Woetzel, and coauthors note, however, that Africa lags behind other developing regions when it comes to consumption, due in part to larger segments of the population that live in poverty.
A set of 5 segmented bar graphs shows consumer segments, with Africa as the main segment and China, India, Southeast Asia, and Latin America as comparisons. The data presented are from 2000–20, broken into 4 consumer segments for each year. The segments include the below consuming class, earning less than $11 a day; the entry-level consuming class, earning $11–$50 a day; the established consuming class, earning $50–$110 a day; and the higher consuming class, at more than $110 per day. Africa’s below-consuming-class population hasn’t changed much over the past 20 years, staying at about 80%. Other regions’ populations living under $11 a day passed below Africa’s percentage threshold, in 2012 for India, in 2009 for China, and in 2003 for Southeast Asia. The share of Latin Americans living in the below consuming class was already lower than Africa’s 2020 level at the beginning of the time frame.
Source: World Data Lab.
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To read the report, see “Reimagining economic growth in Africa: Turning diversity into opportunity,” June 5, 2023.