Young Africans have taken to saving for their future rather than getting the instant thrill of spending on lavish items according to the Barclays Africa Prosper Report (Image: kris krüg).
Young Africans would rather invest their cash than spend it on luxury items, a survey by Barclays Africa Group has found.
Released on 28 October in Johannesburg, Barclays Africa’s Prosper Report shows how Africans equate prosperity with achieving financial freedom. The report is the summary of a survey of more than 7 000 respondents across socio-economic groups from South Africa, Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda, Zambia and Zimbabwe.
“The survey provides invaluable insights into what is important to people, their dreams and aspirations – essential intelligence if we are to contribute to building strong and sustainable economies on the continent,” said Maria Ramos, the chief executive of Barclays Africa Group. “The results are fascinating and underscore the fact that Africa’s rising middle class is effecting positive economic and socio-political transformation. What is particularly noteworthy is that nearly 80% of the respondents are between the ages of 18 and 35. This is significant because Africa has one of the highest youth populations in the world.”
There was a remarkable similarity in the aspirations and hopes of the respondents even though they came from 11 different countries. “The results highlight the fact that as Africa’s young and emerging middle-class continues to develop and grow, they are expressing their economic power in new ways, for example, prioritising long-term financial security through investing and education,” she said.
Bobby Malabie (left) Group Executive at Barclays Africa and Professor Monde Makiwane (right) of the Human Sciences Research Council at the launch of the inaugural Barclays Africa Prosper Report (Image: Barclays Africa)
At the top of each respondent’s list of what would help them progress were computers and books, while savings were considered to be the primary vehicle to achieve financial freedom to prosper and achieve specific goals.
Bobby Malabie, Barclays Africa’s group executive of marketing, communications, citizenship and public affairs, said: “The Barclays Africa Prosper Report shows that people work hard for their money and want their money to work hard for them. What is particularly encouraging is that when questioned further, the youth of Africa would rather invest their money to fund further education than spend it on flashy consumer goods.
“Investment, education and savings are seen by Africans as the main drivers of prosperity to open the doors to economic growth. It is also clear that Africa’s emerging youth presents the continent with an unprecedented opportunity to deepen our human capital, and with the right tools, tomorrow’s decision-makers can unlock Africa’s potential.”
In the survey, 78% of the respondents were between the ages of 18 and 35, representing a significant portion of the “youth bulge”, the future drivers of the African economy. The youth bulge is a common phenomenon in many developing countries, where a large proportion of the population comprises children and young adults, thanks to a decrease in infant mortality and steady levels of fertility.
Four of the main findings of the survey were that: if given $100 (about R1 000) to help them prosper, 49% of respondents would invest it; almost a third would buy a computer (30%) and books (24%) to help them prosper. For 66%, lack of finances was a major barrier to prosperity, but for 37% this was also the easiest aspect of their life to change. Almost half of respondents would most likely consult a bank to obtain financial prosperity; only 10% would consult a family member.
Professor Monde Makiwane of the Human Sciences Research Council (HSRC) provided an independent analysis of the research. He said: “A decrease in mortality rates coupled with the youth’s connectivity to a global community which is increasingly aided by technology, means we have an emerging youth bulge of Africans [who] are more optimistic than ever before.
“Africa’s youth are confident they will be around to live their future. Given this optimism, they prefer to spend their money on computers and books to aid their prosperity, rather than making flashy statements in their local communities by parading the latest must-have item.”
The Barclays Africa Prosper Report addressed critical issues of financial behaviour and prosperity that had either been missed or poorly measured by previous social and financial surveys in Africa, Makiwane added.
Across the 11 countries, 73% of those surveyed indicated that they were familiar with the term “prosper”. To prosper, they said, mostly meant “to be successful”, “to be fortunate” and “to thrive”, especially in terms of personal finances, but also in terms of health, career satisfaction, spiritual wellness and happiness. Spontaneous definitions of what prosper meant to an individual also revealed a commonality across the continent: 39% defined it as achieving one’s goals or dreams in life and 22% associated it with financial success.
“Encouragingly, one of the most significant findings from this African survey is the high level of savings and investments reported by participants. Almost 50% of respondents would save or invest to help them prosper financially, a powerful statistic if viewed in the context of the Asian savings boom,” said Makiwane.
Several decades ago, Asia experienced a youth bulge. The continent took advantage of this by creating employment opportunities and mobilising the youth to save. Continued economic growth and a high savings rate have fuelled wealth creation in the region and its propensity to save is exceptional when compared to the United States or Europe: gross national savings range from a low of 24% of gross domestic product in the Philippines to a high of 50% in China, compared with 13% in the United States and 19% on average across Europe.
According to Barclays, the survey was designed and deployed via the online research specialist, Columinate, to an online research access panel as well as to targeted social media channels in each country. Data collection ran from 14 April to 8 August 2014. A total sample of 7 052 was achieved. Eight of the 11 countries had more than 500 respondents; the Seychelles had a sample of 82, Mozambique 309 and Tanzania 416.
HSRC contributed perspectives from the social sciences to the study. Its analysis team drew from theories and patterns of economic and social transition to analyse and interpret the data and the findings of the survey.
Summary of sociological findings
Some of the important sociological findings from the survey are that Africa’s growing middle class is driven by three basic characteristics:
· They are mostly in the younger working age group with basic skills that can be advanced by exposure in different sectors of the economy and society.
· Their integration into economic and socio-political life in the modern global village is facilitated by advancements and increasing accessibility of the internet and mobile communication technology.
· A growing proportion of this group comprise a large and expanding middle class that is known to catalyse economic growth.
Being financially successful was the most common current priority by participants. Three major obstacles to financial prosperity they reported were a lack of finance (reported by 68.9%), a lack of opportunity (50%) and a lack of financial advice (26.2%).