The number of automobiles on the streets of Addis Abeba seems to
increase each day. Newly built wide lane roads, the
growing economy, expanding business mindedness, and
increasing income have pushed car ownership so high
that parking lots across the city are crowded at any
A car, broadband Internet, a degree, and a house lift an individual up
to the middle class, according to newly published
research conducted by African Development Bank (AfDB).
No car, no promotion to the middle class, seems to
be the conclusion.
An Ethiopian needs to have a permanent job paying her 66,000 Br
annually to join the lucky 21.5pc of Ethiopians in
the middle class, the research found. With a monthly
salary of 5,500 Br, he could fill up his car, pay
for health insurance, and send her children to
school, according to the research.
Those far down the ladder now might have the chance to jump up a few
rungs in 2030, when it is projected that Ethiopia
would top the chart in middle income dominance with
Nigeria and South Africa.
The research failed to indicate the opportunity cost of joining the
middle class, given the rising cost of living,
unbridled unemployment, mounting functional
illiteracy, and a burdened business environment.
Provided that individual mobility is a function of overall societal
prosperity, the broader picture matters most.
Strong economic growth and a stable investment climate are the
requirements for producing a critical mass of middle
incomers. With a toddling private sector that is
dwarfed by heavy state intervention, it is uncertain
how Ethiopia fits into the projection.
The expanding service sector, signified by the mushrooming cafés,
restaurants, pizzerias, night clubs, and pensions,
might fit into the perspective. So long as the
service sector is at the wheel, upward mobility
would remain temporary in Ethiopia, where only five
per cent of the middle class have a stable income,
the research found.
Not only do middle incomers provide an economy with entrepreneurial
clout and technical skill, but they demand
accountability from the government and appointment
to the bureaucracy to be driven by merit, the
The demand side of the equation would remain a challenge for Ethiopia
as long as the prevailing business and public
service systems are plagued with patrimony,
incompetence, and corruption.
The two sides of the equation are highly correlated. Expecting economic
growth driven by middle income skills would not
materialise without establishing a transparent
business regime and entrepreneurial support system.
Countries with strong economic growth and a vibrant private sector have
a big middle income population and the reduction of
income inequality has a lot to contribute to help a
vibrant middle income take off, the research found.
Ironically, the construction boom along Africa Avenue (Bole Road) might
show that Ethiopia is shining, while the slum scene
on Tesema Aba Kemaw Street (Teklehaimanot Road)
alerts us to the fact that a lot remains to be done.
Middle income stability is far from guaranteed in
Shopping and entertainment are typical to the lifestyle of the African
middle class, as the research revealed.
The flourishing shopping malls, eateries, and franchise cafés are the
customary places where the Ethiopian middle class
However, consumption expenditure erodes long-term investment. Growing
economies such as Ethiopia should rather encourage
citizens to save. To this end, financial
institutions need to increase the saving interest
rate, and avail affordable investment opportunities
for the middle class.
Creating a middle class is like a fission reaction where growth in one
sector creates a domino effect on the other.
Middle incomers demand quality education for their children. Private
schools will mushroom when their numbers increase.
As they also care about their health, private
healthcare providers would be encouraged. This would
decrease the burden on the public financed health
system and help to create an efficient allocation of
The process might also create lopsided resource allocation. More cars
need better roads. As the poor do not drive, the
middle incomers would proportionally benefit from
the roads more. Resource inefficiency might loom
while inequality burgeons.
The toughest question posed to the government by the emerging middle
class would be their insistence on the rule of law,
broad freedoms, and equal opportunities. The timing
of the demands may not conform to the rate of
reform. Piling up backlogs of demand would result in
With a limited democratic culture and experience, the demand of all
interest groups to be fairly represented in
government might not be satisfied. The system should
leave the loser at least the spoils.
The challenge of absorbing a growing middle class is all rounded, and
expanding the democratic space is necessary to this
end. Seeing that the middle class is the engine of
economic growth, innovation, transformation, and
democratisation, the building of a national
absorption capacity is essential.
This would demand changing the game from no car, no class to “Drive
Safely in 2030.”