Financial freedom takes precedence over physical health, career satisfaction and family time, and it is a major barrier to prosperity.
- New Barclays Africa Prosper Report shows Africans would rather invest than spend money on luxury as growing youth bulge set to drive economic growth on the continent
- To prosper, Africans need to achieve financial freedom (53 per cent) now and in ten years’ time.
- Computers (30 per cent) and books (24 per cent) topped the list amongst items that would be purchased to help them prosper.
- Seventy-eight percent of the respondents are between 18 and 35 years of age, representing a significant portion of Africa’s emerging middle class population.
- Africa is experiencing a youth bulge similar to the one experienced in Asia and its savings boom – a trend known to catapult developing economies forward.
- First online bespoke prosper survey conducted across Africa has captured the views of more than 7 000 respondents; 838 Kenyans.
- Data collection ran from 14th April 2014 and was concluded on the 8th of August 2014
- Nairobi, 30th October 2014. Barclays Bank of Kenya has today released The Barclays Africa Prosper Report, which identifies that Africa’s youth, given the right tools are set to become the drivers of economic prosperity.
The report reveals that Africa’s urban youth consider investment and savings as the vehicles to financial independence, while describing financial freedom as having enough personal wealth to live, without having to actively work to pay for basic necessities.
Locally, Kenyan youth consider purchasing books and computers as the key to their financial freedom.
Speaking during the release of the results in Nairobi, Barclays Bank of Kenya’s Managing Director Jeremy Awori said that the findings disclose important elements that will drive continental growth.
“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 to spend it on flashy consumer goods,” noted Jeremy.
Adding,“Investment, education and savings are seen by the youth as the main drivers of prosperity to open the doors to economic growth. It is also clear is 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. This is key information that will guide our 2015 strategic direction.”
The survey was carried out between April – August 2014 and collected views from up to 7,000 youth, across 11 countries in Africa including Botswana, Mozambique, Seychelles, Mauritius, Tanzania, Ghana, Zambia, Uganda, Zimbabwe and later Egypt.
While providing an independent analysis of the research, Professor Monde Makiwane of the Human Sciences Research Council (HSRC) said, “The Barclays Africa Prosper Report captures the prosperity perspectives, experiences and life strategies of Africa’s growing middle class who hold the key to accelerated economic growth and transformation in Africa.”
“Encouragingly, one of the most significant findings from this African survey is the high level of savings and investments reported by participants. It addresses critical issues of financial behaviour and prosperity that have either been missed or poorly measured by previous social and financial surveys in Africa,” says Makiwane.
Notably, seventy-eight per cent of the respondents were between 18 and 35 years of age, 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 share of the population is comprised of children and young adults thanks to a decrease in infant mortality and steady levels of fertility.
Several decades ago, Asia experienced a youth bulge. Asia 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 Asia. The Asia Pacific region’s propensity to save is exceptional when compared to the United States or Europe. Gross national savings range from a low of 24 percent of GDP in the Philippines to a high of 50 percent in China, compared with 13 percent in the United States and 19 percent on average across Europe .
The campaign encouraged people of all ages, culture and gender to share with the world what the word ‘prosper’ signifies and how they are able to prosper.
Kenyans define what it means to prosper
- If given US$100/KES 8500 to help them prosper, 63 percent of respondents in Kenya would invest it, higher than the Pan African score of 49 percent.
- Computers (38 percent) and books (26 percent) topped the list amongst items that would be purchased to help them prosper thus revealing that many associate prosperity with education.
- While lack of finances is a major barrier to prosperity (72 percent) in Kenya, this is also the easiest aspect of their life to change (41 percent).
- Sixty one percent of the Kenyan respondents would most likely consult a bank to obtain financial prosperity. Only 8 percent said they would consult a family member.
Sociological findings – summary
• Africa’s growing middle class is driven by three basic characteristics. First, they are mostly in the younger working age with basic skills that can be advanced by practice exposure in different sectors of the economy and society. Second, 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. Third, a growing proportion of this group comprise a large and expanding middle class that are known to catalyse the process of economic growth.
• Being financially successful is the most common current priority by participants in the survey across different socio-economic categories measured. Three major obstacles to financial prosperity reported by survey participants include a lack of finance (reported by 68.9 percent), a lack of opportunity (50 percent) and lack of financial advice (26.2 percent). It is not surprising that a lack of finance is the main obstacle identified. Considering the possibility that many people in this category are in regular employment, the possibility or options for other major obstacles would be limited. An interesting finding in this regard is how the views of those self-employed (who are a distinct category of entrepreneurship differ significantly from others.
• There is an ongoing debate in social science literature is about the level or scale of entrepreneurial spirit among sub-groups of the middle class (such as the youth). This relates to contentions about how the middle class is conceptually defined and empirically categorised. A recent study on the Emerging Middles Class in Developing Countries (OECD Development Paper) noted that a majority of the middle class in African countries are employed in the public sector. If this a true characterisation, it has implication for their prosperity strategy since many people in employment, especially in the public sector would tend to have less volatile prosperity ambitions in the medium term than others.
• As many as 60.6 percent of all respondents would invest or save an extra $100 if they had it; 14.7 percent would use if for education and skills-related expenses and 13.2 percent would use it to pay off debt.