- Title: NIGERIA: Nigeria's middle class said to be driving growth, experts skeptical.
- Date: 22nd January 2014
- Summary: ABUJA, NIGERIA (RECENT) (REUTERS) VARIOUS OF LUXURY HOMES LAGOS, NIGERIA (RECENT) (REUTERS) VARIOUS OF SWIMMING POOL BY BEACH VARIOUS OF BOATS AT WATER FRONT VARIOUS OF HUGO BOSS OUTLET VARIOUS OF GUINNESS BUILDING VARIOUS OF FELIX ENWEMADU, GENERAL MANAGER, DIAGEO BRANDS NIGERIA WORKING AT HIS OFFICE (SOUNDBITE) (English) FELIX ENWEMADU, GENERAL MANAGER, DIAGEO BRANDS NIGERIA, SAYING: "About say three to four percent of the population can afford luxury goods so these are the guys and ladies who want to invest behind the range rovers can afford a Ciroc in the outlets on a week on week basis so they will be about three to four percent of the population. The emerging middle class I'll say will be about say close to 15 to 20 percent of the population." EXTERIOR OF TERRA KULTURE RESTAURANT VARIOUS OF CUSTOMERS EATING AND INTERACTING IN THE RESTAURANT SECTION VARIOUS OF MANAGER TALKING TO STAFF BASKET OF FRUITS AND BLENDER ON COUNTER (SOUNDBITE) (English) JOSEPH UMOIBOM, GENERAL MANAGER, TERRA KULTURE, SAYING: "Our clients are mostly middle and upwardly mobile people, we cater a lot for the expatriate community, we cater also for Nigerians and because of the nature of our programmes, we do theatre every Sunday so it attracts actually a cross-section of people because a lot of people want to see Nigerian plays or even enjoy the atmosphere that the theatre brings that is different from a cinema or when you're watching a movie." VARIOUS OF LOW COST HOUSING SUBURB VARIOUS OF HOUSES VARIOUS OF PEOPLE WALKING THROUGH SLUM STAGNANT WATER VARIOUS OF VENDOR CHOPPING MEAT TRADER (SOUNDBITE) (English) BISMARCK REWANE, FINANCIAL ANALYST, SAYING: "The middle class in Nigeria has not grown that rapidly okay, the working class is growing rapidly, the people who are living above poverty but the fact that you are above poverty does not make you a middle class, does not define you as a middle class, middle class in many parts of the world are defined as landed gentry in the sense that they own land, they own property. The number of people that own property in Nigeria are less than 2 percent of the population, okay, so I would say that the Nigerians who are living above the poverty line have increased in number but the Nigerians who can qualify as the middle class or bourgeoisie who have a major stake in the society are not growing as fast as is envisaged." VARIOUS OF POWER WORKERS FIXING CABLES IN STREET STREET SCENES
- Embargoed: 6th February 2014 12:00
- Keywords:
- Location: Nigeria
- Country: Nigeria
- Topics: General
- Reuters ID: LVA8WWZ8O7XV87XCQOJ8JDQ90MLJ
- Story Text: Luxury homes and properties are changing the landscape of residential areas in Nigeria's urban cities.
Well-designed blocks of houses with balconies built in palm-fringed private compounds are becoming popular among a growing number of buyers and renters, causing something of a property boom in the country.
Nigeria's construction and real estate sectors are growing at more than 10 and 12 percent respectively, a plus for foreign and Nigerian construction firms, including UPDC, Cappa D'Alberto and Julius Berger.
The top-end range is dominated by well established players and developers are said to target middle-income workers in major cities, such Lagos, Abuja and the oil-hub Port Harcourt.
The most popular units fall in a price bracket of 123,000-214,100 US dollars, developers and estate agents say.
A recent report by investment bank Renaissance Capital said Nigeria's middle class make up around 23 percent of the population and earn around 80,000-100,000 naira (490-610 US dollars) per month.
The market of elite circles with money to spend aspire to finer things.
Ordering luxury drinks like champagne and single-malt whiskies at exclusive night clubs has become a not-so-rare display of prosperity and the world's top luxury product companies are standing up and paying attention.
Felix Enwemadu is Nigeria's general manager for leading global drinks business company, Diageo.
"About say three to four percent of the population can afford luxury goods so these are the guys and ladies who want to invest behind the range rovers can afford a Ciroc in the outlets on a week on week basis so they will be about three to four percent of the population. The emerging middle class I'll say will be about say close to 15 to 20 percent of the population," he said.
After years of headlines about Africa's poverty, some analysts see middle class buyers with swelling disposable incomes as fuelling an economic boom from South Africa to Nigeria and Kenya.
In its Africa Pulse report last year, the World Bank said consumer spending accounted for more than 60 percent of Sub-Saharan Africa's buoyant economic growth, which it forecast would accelerate to more than 5 percent over the next three years, far outpacing the global average.
In high-brow Victoria Island, a choice location for many middle class income earners, establishments like Terra Kulture offer a new experience. Lovers of African art, theatre and food can get an all round fix in one location.
Joseph Umoibom, is Terra Kulture's general manager.
"Our clients are mostly middle and upwardly mobile people, we cater a lot for the expatriate community, we cater also for Nigerians and because of the nature of our programmes, we do theatre every Sunday so it attracts actually a cross-section of people because a lot of people want to see Nigerian plays or even enjoy the atmosphere that the theatre brings that is different from a cinema or when you're watching a movie," he said.
However, the majority of Nigerians still live in poverty, in shanty towns or in run down iron-roofed houses where they lack basic services like clean water and sanitation facilities.
Millions still live on less than 2 dollars a day with the number of jobless youth growing daily.
Some analysts say accurately quantifying the African middle class has become an obsession for institutions such as the African Development Bank (AfDB) and World Bank, as well as consultancies advising corporate clients seeking an edge in the booming continent.
Bismarck Rewane, a Lagos based financial analyst says reports that Nigeria's middle class is growing fast and rapidly expanding the economy, may not be totally accurate.
"The middle class in Nigeria has not grown that rapidly okay, the working class is growing rapidly, the people who are living above poverty but the fact that you are above poverty does not make you a middle class, does not define you as a middle class, middle class in many parts of the world are defined as landed gentry in the sense that they own land, they own property," said Rewane.
"The number of people that own property in Nigeria are less than 2 percent of the population, okay, so I would say that the Nigerians who are living above the poverty line have increased in number but the Nigerians who can qualify as the middle class or bourgeoisie who have a major stake in the society are not growing as fast as is envisaged," he added.
The World Bank forecast foreign direct investment in Sub-Saharan Africa will reach 54 billion US dollars by 2015, up from 37.7 billion US dollars in 2012.
At the same time, a greater number of African countries are achieving relative stability in politics and economic policy, allowing the middle class to emerge. - Copyright Holder: REUTERS
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