alexa Here is a case for why riches can be bad and poverty very good for you - Daily Nation

Here is a case for why riches can be bad and poverty very good for you

Wednesday May 11 2011

By CHARLES ONYANGO-OBBO

The African Development Bank (AfDB) is becoming cool these days. It recently released a report entitled Middle of the Pyramid: Dynamics of the Middle Class in Africa (at http://www.afdb.org).

And it is just that; a major effort to figure out how many Africans are middle class, how much money they have in their wallets, where they get it from, and the lifestyle they are purchasing with the money.

Most bank reports will bore you to death. They are full of dry numbers and often give information of interest to small specialist groups, e.g. how much money has been lent to farmers and the amount of fertiliser they are buying with it.

One of the few exceptions a few years ago was something that Stanbic Bank did about Africa’s future economic fortunes.

The definition of the middle class is extensive, but broadly they are the individuals with annual incomes of more than $3,900 (Sh328,000), and spend between $6 (Sh500) and $10 (Sh840) a day.

Today they have risen to 34.3 per cent (or 313 million) of the African population, up from around 111 million (26.2 per cent) in 1980.

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If you rank them, the top 10 African countries with the highest percentage of their population being middle class are Tunisia (89.5 per cent), Morocco (84.6 per cent), Egypt (79.7 per cent), Algeria (76.6 per cent), Gabon (75.4 per cent), Botswana (47.6 per cent), Namibia (47.4 per cent), Ghana (46.6 per cent), Cape Verde (46.4 per cent), Kenya (44.9 per cent).

Kenya has a marginally larger percentage of its population in the middle class than South Africa, the continent’s richest nation, with 43.2 per cent at 11th position (you have to love these twists).

The island states of the Seychelles and Mauritius are not factored in. They might have been higher and pushed Kenya off the top 10.

The Africa middle class becomes quite interesting if you look at it against another cheeky and quirky index; “The Shoe Throwers Index”, developed by The Economist after the uprisings in Tunisia and Egypt to try and predict the likelihood of revolutions in the Middle East and North Africa.

The name derives from the Arabs’ tendency to throw a shoe at someone as an expression of utmost disgust (remember that Iraqi journalist who threw a shoe at (then) US president George W. Bush when he visited Iraq?).

The Shoe Throwers Index weights various factors like the share of the population that is under 25, the number of years the government has been in power, both corruption and lack of democracy indices, GDP per person, and the level of censorship, to determine vulnerability to uprising. The most important factor in the index is the population under 25.

Which is why the report in the Daily Nation on Wednesday that young Kenyans are being recruited to fight for the hardline Somali al Shabaab, should be cause for concern.

The Shoe Throwers Index found that the countries from that region at the highest risk of revolution were Yemen, Libya, Egypt, Syria, Iraq, Oman, Mauritania, Saudi Arabia, Algeria, and Jordan.

Yemen, Libya, and Syria are on fire. Egypt did its thing and ousted Hosni Mubarak, the strongman. There were protests in Mauritania and Algeria that were quashed quickly.

The index is fairly accurate and would have been nearly 100 per cent spot on if it had Tunisia in the top 10 instead of 12th.

Looking at these two tables side by side, one can see that there is some relationship. Tunisia has the highest percentage of its population being middle class in Africa. Egypt has the third highest.

Yet, these are the places where the governments were swept out of power in a huge wave of discontent.

The reasonable conclusion here is that the richer a country grows and expands its middle, the closer its political class steps to the mouth of the grave if it remains corrupt, does not allow freedom of expression, lets the gap between the rich and poor grow bigger, and does not offer hope and opportunities to its youth.

This is why the report in the Daily Nation on Wednesday that young Kenyans from all parts of the country are being recruited to fight for the hardline Somali al Shabaab should be cause for concern.

There is another possible, but horrible, conclusion; the African dictator who wants to stay in power long should keep his country poor.