3 Things Multinationals Don’t Understand About Africa’s Middle Class

Multinational corporations (MNCs) had hoped to tap Africa’s one-billion-strong population and its much-vaunted “middle class.” But while the region is home to some of the fastest growing economies in the world, sales and profits in these markets have not lived up to many businesses’ expectations. Research shows that MNCs are making three mistakes in Africa: 1) Companies set unrealistic targets due to misunderstanding the drivers of consumer spending power; 2) Companies underestimate the extent to which local factors determine how, where, and why consumers make purchasing decisions; and 3) Companies are not considering how the consumer class (which we define as those living on US$ 3.90 and above per day, the point at which people can spend beyond mere survival) is changing across the region.