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Africa's Middle Class: Striving to Develop a Continent (GlobalPost)

May 19, 2010

GlobalPost quoted CGD senior fellow Vijaya Ramachandran on Africa's private sector and middle class.

From the article:

"Africa’s middle class is not only crucial for economic growth but is essential for the growth of democracy, said Vijaya Ramachandran, senior fellow at the Center for Global Development and author of “Africa’s Private Sector.”

“The middle class in Africa, like everywhere else, supports democratic governments that function well and that are accountable,” said Ramachandran, who has specialized in African development issues at the World Bank and the United Nations after getting a PhD in economics from Harvard. She defines Africa’s middle class as those living on more than $5 per day.

Above $5 dollars a day would not be enough income to be included in the middle class in the U.S. or other First World countries, but Ramachandran says it is sufficient to be part of Africa’s “aspirational class.”

“They have escaped the worst burdens of poverty,” said Ramachandran. “They are able to meet their basic needs in nutrition, health and housing. They are not so insecure, they don’t risk losing this on a daily basis, which is what it is like for those existing on less than $5 per day.”

“Africa’s middle class supports states that provide public services like education, health, electricity and water,” said Ramachandran. “The middle class is central to ensuring the sustainability of democratic forms of government. The middle class is essential to building democratic institutions, for creating a civil society. These are important for Africa.”

Africa’s middle class is strongest in countries that have robust and growing private sectors. “Countries in East and Southern Africa that sustain a viable middle class and that hold governments accountable include countries like Tanzania, Kenya, South Africa, Botswana and Namibia. Mozambique’s middle class is small but growing in size and importance,” said Ramachandran. “In West Africa, Ghana’s middle class is doing well.”

A healthy private sector enables Africa’s middle class, said Ramachandran. “Businesses, both small and big, provide jobs. It supports more entrepreneurs. That’s how a middle class grows,” she said.

Although thousands of Africa’s best educated have left for jobs overseas, it is not a “brain drain” that harms the continent, argues Ramachandran.

“It does not have to be viewed as a flight of human capital that hurts Africa,” she said. “These are enterprising people who are taking advantage of the huge differences in wages. They can get paid much more for their skills in the First World. They send back significant remittances that get others educated. Over time they contribute to the continent’s development, even if it is from a distance.

“In Nigeria and Ghana we are seeing a return of young people who worked in the finance sector in New York and London,” said Ramachandran. “They are bringing valuable skills and an interaction with the First World. They are also bringing a view of how things work in the First World.”"

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