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Africa's stunning growth can't hide pervasive poverty

There was a flutter of excitement among Africa's chattering classes this month when a new study concluded that 34 per cent of Africans can be described as middle-class consumers.

The study by the African Development Bank was a highly controversial one -- especially when a closer look revealed that 180 million of these supposed "middle class" consumers have such meager incomes that they are spending only $2 to $4 a day.

The study was, in some ways, an encouraging look at the continent's economic growth, showing that Africa is not the hopeless land of poverty and despair that many Westerners have assumed. But there was plenty of data in the study, and in other recent reports, to raise a cautionary flag about the region. Africa is far from an Asian tiger, and naïve cheerleading is not the best response to Africa's difficult problems.

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First the good news: the study estimated that 313 million Africans can be considered middle-class consumers, spending money on non-essential goods such as mobile phones, cars, televisions or refrigerators. This number has increased by more than 60 per cent in the past decade, and it suggests that Africa has roughly as many middle-class consumers as China or India.

This fits with other data suggesting that Africa's economies are booming. According to the International Monetary Fund, the gross domestic product of sub-Saharan Africa will rise by an impressive 5.5 per cent this year and 5.8 per cent next year, making it the fastest expanding region in the world outside Asia. Of the 10 fastest-growing economies in the world this year, seven will be in Africa.

Yet the gap between rich and poor is still massive. The poorest 61 per cent of Africans are still spending less than $2 a day, and this percentage has declined by just eight points in the past two decades, according to the African Development Bank. It also estimated that the collective net worth of the 100,000 wealthiest Africans is equivalent to an incredible 60 per cent of the continent's gross domestic product.

Another new report, by the Africa Progress Panel, warned that too much of Africa's economic expansion is "low quality" growth. Africa's trade tends to be one-dimensional, almost entirely based on the export of natural resources and raw materials, and it lacks the diversification and structural transformation that it badly needs. These weaknesses explain "why so little of the continent's high GDP growth translates into social development and tangible improvements to people's lives," the report said.

"Despite a decade of strong economic growth," it added, "poverty remains pervasive throughout the continent."

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