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Income and Expenditure in Middle East and Africa

January 2020

Africa and the Middle East’s growing population and high levels of unmet potential all make the region an exciting prospect. However, despite a growing middle class, the largest population growth in 15 out of 20 countries is the lowest income group. There are extreme income inequalities which are set to increase – necessitating a granular approach to targeting consumers. The gender income gap is set to narrow and spending on family goods and services are particularly bright.

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Key Findings

Disposable income grows but remains the lowest globally

Total disposable income is set to rise by just under 40% in real terms over the forecast period. This puts the Middle East and Africa (MEA) region in second place globally in terms of real gain behind Asia Pacific. However total income per household remains the lowest globally, at less than USD10,000. The region also has the highest spending on essential goods.

Due to dynamic population growth all classes are growing, but the most dynamic growth will be in lowest economic groups

Spending on essentials such as food and drink, housing and clothing accounts for almost 60% of spending across the region. With the rapid expansion of the lowest economic classes, this is not set to change significantly in the forecast period – with 15 out of 20 key countries seeing the most dynamic growth in consumer group E. In many countries, close to 70% of the population live on less than USD5,000 per year.

Big income disparities and rising income inequality

Huge levels of income inequality exist across the region, and this is set to increase to 2030, leading to more polarised consumption. Companies wanting to implement successful business strategies will need to adopt a targeted, granular strategy.

Gender gap is declining, although a big disparity still exists

A combination of economic growth, urbanisation, a shift from oil dependency, growth in educational opportunities for women and other societal changes across the region has meant that more women are entering the workforce, and the gender gap is decline.

Families and extended households remain dominant

Extended households and families remain the leading types of households, despite dynamic growth in single-person households. This presents opportunities for family-oriented goods and services.

Introduction

Scope
Key findings

Regional Overview

Disposable income remains lowest globally, but is set to grow
Lowest levels of savings globally
Governments target the female workforce
Healthy growth in consumer expenditure

Regional Consumer Expenditure

MEA spending on essentials remains highest globally
Economic and political uncertainty hamper growth
Huge disparities in consumer expenditure by decile
Opportunities for family-orientated goods and services

Regional Distribution of Income

People aged 15-19 set to enjoy the fastest income growth
Class E set to expand fastest and remain largest across the region
Successful strategies need to focus on the lowest income groups
Huge inequalities across the region
Gap forecast to shrink by 2030

Country Snapshots

Algeria: share of income and wealth of the middle segment
Algeria: middle-income households
Algeria: essential spending by middle-income households
Cameroon: share of income and wealth of the middle segment
Cameroon: middle-income households
Cameroon: essential spending by middle-income households
Egypt: share of income and wealth of the middle segment
Egypt: middle-income households
Egypt: essential spending by middle-income households
Iran: share of income and wealth of the middle segment
Iran: middle-income households
Iran: essential spending by middle-income households
Israel: share of income and wealth of the middle segment
Israel: middle-income households
Israel: essential spending by middle-income households
Kenya: share of income and wealth of the middle segment
Kenya: middle-income households
Kenya: essential spending by middle-income households
Morocco: share of income and wealth of the middle segment
Morocco: middle-income households
Morocco: essential spending by middle-income households
Nigeria: share of income and wealth of the middle segment
Nigeria: middle-income households
Nigeria: essential spending by middle-income households
Saudi Arabia: share of income and wealth of the middle segment
Saudi Arabia: middle-income households
Saudi Arabia: essential spending by middle-income households
South Africa: share of income and wealth of the middle segment
South Africa: middle-income households
South Africa: essential spending by middle-income households
Tunisia: share of income and wealth of the middle segment
Tunisia: middle-income households
South Africa: essential spending by middle-income households
UAE: share of income and wealth of the middle segment
UAE: middle-income households
UAE: essential spending by middle-income households
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