With our finger on the pulse of what is happening eKasi
(in the township), Loxyion Conexyion is able to deliver the most up to date
insight based solutions to our clients.
Focus on the ever increasing black middle class
The middle class plays a pivotal role in South Africa, not only from a purely economic perspective, but also from a social and political point of view. The growing black share of the middle class suggests that race may be becoming disassociated from class. There is some uncertainty surrounding the magnitude of this shift, but what appears to be clear is that the middle class is slowly becoming more racially representative and this is a promising sign.
South Africa’s middle class represents households earning between R15 000 and R50 000, with their own transport, a tertiary education, employment in a white-collar job and owning their home or spending more than R4 000 a month on rent. The black middle class has increased in size from 1.7 million in 2004 to an estimated 4.2 million today. Only 3 percent, or about 120 000 black middle class South Africans live in the Western Cape, mainly in Cape Town. Gauteng, meanwhile, had 46 percent, or about 2 million black South Africans. According to a Unilever Institute for Strategic Marketing study, the black middle class collective spend more than R400bn annually.
This is more than the R380bn spent by the 2.8 million white middle class adults. The study defined middle class as a black adult, older than 16, and living in a household with a combined monthly income of between R16 000 and R50 000. BEE had also contributed, as had the early high economic growth of the 2000s. By the end of 2015, the size of the black middle class will surpass the size of the white population in South Africa.
Loxyion Conexyion continues with Russian Bear
|Post a successful brand campaign Russian Bear has extended their contract to award Loxyion Conexyion with the responsibility and the privilege of growing the brand in the JHB, EC, CT and KZN townships.|
Black middle class has expanded quickly but may now slow – new IRR report.
The IRR last week released a report on the size, growth, and likely future expansion of South Africa’s middle class. The report relied on indicators ranging from household spending levels to workplace seniority, educational levels, medical insurance cover, internet usage, property ownership, banking patterns, and appliance ownership. The report concluded, based on different definitions that might be adopted, that at most 2 in 10 South Africans could lay claim to a middle class standard of living although the IRR was more comfortable with the estimate that 1 in 10 South Africans lived a middle class standard of living.
Despite the small size of this middle class, there has been considerable growth in the black middle class, which has approached the size of the white middle class. However, the IRR warned that as a first generation middle class, the black middle class was very vulnerable to losing their status as a result of developments such as a sharp economic downturn or a period of rapidly rising interest rates.
The report also warned that the depressed domestic economic environment would put the brakes of any significant future middle class expansion. In addition, the fiscal crisis meant that the size of the civil service could not be extended as a black middle class incubator – a role it has played quite successfully over the past 20 years. The report, therefore, found that any significant future middle class expansion would depend on South Africa securing an economic growth turnaround. The IRR warned that such a turnaround was unlikely in the current domestic policy climate.
The IRR’s CEO, Dr. Frans Cronjé, said that “creating a policy environment in which any child born in South Africa might realistically aspire to reach a middle class standard of living should be the single most important priority for a South African government. The apartheid era government denied such aspirations to a majority of the country’s people. The post-1994 government has done better but too many areas of policy still undermine the educational outcomes, entrepreneurship, and investment-driven growth that is so important to unlocking access to the middle classes. That a child might aspire to reach a middle class standard of living should be seen as a moral as well as a social, economic, and political imperative. There is no doubt that under the government’s current policy framework this imperative is not being met”.
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|CONTACT DANIEL KAHN
T: 021 426 2502
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A: Office 6, 5th Floor,
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