Up and Coming in Kampala Africa’s Growing Middle Class Drives Development
July 9, 2012
By Horand Knaup and Jan Puhl*
Africa’s growing middle class is fueling development across the continent. Ambitious entrepreneurs are creating growth with companies focusing on everything from fashion to pharmaceuticals. But poor infrastructure, corruption and political conflict are hampering their efforts.
Sylvia Owori is examining the photos for the summer collection, but she isn’t satisfied. “Much too much oil on the skin,” she says, pointing to a young woman. “We want to show off the dress, not her legs.” A click of the mouse, and the candidate is out of the running.
A new girl appears on the screen. She is wearing a yellow miniskirt, as she poses against a pale and misty backdrop of Lake Victoria. “This one is good,” says Owori, to an audible sigh of relief in her studio in the Ugandan capital Kampala. The photographers, designers and seamstresses surrounding her are relieved.
Owori is East Africa’s most successful fashion entrepreneur, the style icon of a growing middle class. She owns boutiques in Kampala and the Kenyan capital Nairobi, and the models in her agency can be seen on runways in Rome and Paris. She also publishes African Woman, a glossy magazine that showcases local fashion trends. “We want to celebrate Africa’s beautiful people,” says the designer.
Owori, who combines modern fashions with African colors, doesn’t shy away from making bold statements. “The fashion world currently has its eye on Africa,” she says. “This is our opportunity, and we should take advantage of it.”
Growing Domestic Demand
She is the epitome of a success story. And success stories are no longer a rarity in Africa, despite its reputation as a continent of poverty and suffering.
Africa’s economy is developing at a pace similar to that of Asian countries, including Japan. Five of the 10 faster growing countries in the world this year are south of the Sahara. Commodities like oil, natural gas, lumber, ores, gold and diamonds make up a shrinking share of economic output. In many up-and-coming countries, mineral resources no longer play the decisive role, as the service sector and manufacturing expand.
This growth is producing a middle class that’s growing from year to year. According to the African Development Bank, this middle class already includes 313 million people, or 34 percent of the total population.
Africa’s middle class lives in the cities, and its members are either salaried workers or, like Sylvia Owori, have their own firms. They are young and well-educated, and they want TV sets, cars and fashionable clothing. The continent now boasts 430 million mobile phone users. The growing domestic demand coming from the middle class served as a “buffer” when the West plunged into crisis in 2008, says Mthuli Ncube, chief economist of the African Development Bank.
Recycling What the West Throws Away
Owori has come a long way. She grew up in poor circumstances in Kampala, and she never knew her father. A relative eventually brought her to London, where she took fashion courses at the city’s Newham College. When she returned to Uganda in 1998, the country had fallen behind, even by African standards, after years of dictatorship and civil war.
She earned her starting capital by importing clothes from the West, but then she began designing her own collections, and soon “Sylvia Owori” was the most popular label among women in East Africa.
Owori has her collection produced by seamstresses in villages. She has trained 200 women and sponsors the purchase of their sewing machines. “When I receive a big order, I can deliver quickly and flexibly,” she says. On the other hand, she says, the women can stand on their own feet when she doesn’t happen to have any work for them.
Her latest creation is a denim laptop bag shaped like the map of Africa. “This bag was once a pair of jeans,” she says. “You threw it into a container for old clothing and sent it to Africa. We made something new out of it and will sell it back to you.” Swedish fashion giant H&M is interested in the bag, and two other Western fashion chains have asked Owori to meet with them in London.
It’s a question of finding new ways to stimulate economic growth. The corrupt oligarchies in many African countries have made money from the export of commodities, but only a fraction of the population has benefited from the proceeds. The growth being generated by Africa’s middle class is more sustainable, say development experts. Much of it is based on the processing of African fabrics, wood and fruits, and it creates jobs.
Small and mid-sized businesses need well-trained workers and political stability. Bureaucracy and corruption are obstructive, and civil wars are bad for business. Africa’s middle class is a “guardian of democracy,” says Ncube of the African Development Bank.
‘The Age of Entrepreneurs Has Begun’
Emmanuel Katongole is a typical representative of this middle class. He drives a shiny black Mercedes SUV and wears tailored suits. The African Development Bank awarded him a business prize for opening a pharmaceutical plant in Luzira, a suburb of Kampala. His company, Quality Chemical Industries, produces 6 million pills to treat HIV and malaria a day, half of which Katongole exports to neighboring countries.
Quality Chemical Industries is a joint venture with Indian manufacturer Cipla, which holds the license for the HIV and malaria drugs, and owns more than 40 percent of Katongole’s company. The company offers its 350 employees training, meals and medical care. “People like to work for us, and we have no disciplinary problems,” says Katongole.
“The age of entrepreneurs has begun in Africa,” says Katongole. When he began importing antiretroviral drugs in the 1990s, about 15 percent of the population in Uganda was infected with HIV. Today it’s only about 7 percent, a decline for which Katongole deserves some of the credit.
He convinced the Indians to come to Africa, and he won over both South African venture capitalists and the Ugandan government, which helped him start the project. President Yoweri Museveni, a mild autocrat by African standards, takes the fight against AIDS seriously — unlike other rulers on the continent.
The government had the ground cleared and leveled for the laboratories, installed the power supply and provided the company with tax incentives. “Quality Chemical Industries is a successful example of a partnership between the private and the public sector,” says Katongole. “Africa has to produce more finished products.” If the world wants to do the continent a favor, he adds, it should help companies like his with financing. “Classic development aid makes governments lazy,” says Katongole. In fact, the reputation of development aid has suffered considerably. African economists argue that it keeps millions of Africans trapped in poverty.
Richard Kimani, who lives in the Kenyan capital Nairobi, about 500 kilometers (about 300 miles) southeast of Kampala, is also banking on entrepreneurial freedom. His company, Kevian, earns about €25 million ($31 million) in annual revenues from the sale of fruit juice concentrates. His employees bottle 75,000 liters of concentrate a day, and about 30,000 small farmers supply Kevian with mangos and pineapple.
Kimani took out a low-interest loan worth millions with the Cologne-based German Investment Corporation (DEG), a state-owned institution that finances private-sector investments in developing countries. Kimani wants to expand Kevian, and new bottling equipment made by the Bavarian bottling machine manufacturer Krones is already on a ship bound for the Kenyan city of Mombasa. It could take a while for the equipment to arrive, however, because the customs agents at the port are corrupt and the roads in Kenya are miserable. “Shipping a container from Europe to Mombasa costs only a little more than transporting it by road from Mombasa to Nairobi,” a distance of 500 kilometers, says Kimani.
He got into the beverage business 20 years as a producer of mineral water. His Kevian bottled water, which comes from a well on the outskirts of Nairobi, filled a market niche. But there was a downside to his success. Kimani is a member of the Kikuyu ethnic group, but the country’s then president only supported members of his own tribe. Banks refused to lend him money, and hired thugs destroyed his plants. But Kimani was undaunted and moved his company farther away from the city. In 2002 he entered the fruit juice business, which had previously consisted of expensive imported products from South Africa and Israel.
Once again, his product was a success. In Tanzania, Rwanda, Burundi and Zambia, more and more health-conscious urban workers are drinking his Kevian juices. Now Kimani even wants to expand into Europe, where he hopes to supply the Heidelberg-based company Wild, which makes the Capri Sun juice drink, with pineapple and mango concentrate.
‘Voter’s Know What’s at Stake’
But the next potential problem is already on the horizon. Kenya holds elections next spring. During the last election, five years ago, politicians incited violence between gangs of thugs, fueling ethnic hatred. As a result, 1,300 people were killed, hundreds of thousands were driven from their homes, the tourism industry was shattered and many businesses were destroyed.
“It won’t be that bad this time,” says Kimani. “Voters know what’s at stake now.” The middle class in Kenya has a lot to lose, he says. It won’t tolerate the same kind of chaos that erupted five years ago.
Translated from the German by Christopher Sultan
*Culled from http://www.spiegel.de/international/
Nkemnji Global Tech
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