Income and Expenditure in Middle East and Africa

October 2021

The population in the Middle East and Africa region is growing rapidly, unlocking high levels of unmet potential and making the region an exciting prospect. Nevertheless, the fastest growing income segment is set to remain the lowest income class, indicating that successful strategies need to focus on these consumers. As pandemic effects continue to threaten female livelihoods, the gender income gap is expected to remain significantly high by 2040, despite empowerment efforts.

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Key Findings

Disposable income is set to grow, yet the regional disparities will remain

Total disposable income is set to almost double by 2040 as economies recover from the effects of the COVID-19 pandemic. In most African countries, income is expected to slightly exceed pre-pandemic levels by 2040, whereas the Middle East region is set to witness more rapid consumer income growth.

The lowest income class is set to witness the most rapid growth

Expenditure for essentials accounts for almost 60% of the total consumer basket, as poverty remains prevalent in the MEA region. The lowest income class (class E) is expanding in 17 out of 20 regional countries, with nearly 70% of the population living on less than USD5,000 per year in seven out of 20 countries.

Rising income inequality

Large-scale income inequality is set to persist by 2040, as the share of middle class households will shrink in almost all countries. As a result, companies will need to strategise among an increasingly polarised consumer market.

Large-scale gender gap is set to persist

Women were affected disproportionately by the pandemic, as mobility restrictions had a severe negative affect on their livelihoods, mostly based in the service sector. However, the governments are expected to continue with implementation of economic diversification reforms, increasing opportunities for female empowerment.

Single person households are set to expand, yet families and extended households remain dominant

Extended households and families remain the leading types of households, yet the single person households will grow rapidly due to changing lifestyles within the region.

Introduction

Scope
Key findings

Regional Overview

Regional disparities to remain as countries recover from COVID-19
Low penetration of banking and income structure to hamper saving rates
Despite female empowerment efforts, gender gap to remain high
Diversification and reskilling rise income and expenditure in MEA

Regional Consumer Expenditure

Lowest level of discretionary spending, due to high poverty rates
Food to remain the largest spending category, others to rise as well
Consumer expenditure by decile to indicate large-scale disparities
Changing lifestyles contributing to fastest growth in single home spending

Regional Distribution of Income

People aged 65+ set to enjoy the fastest income growth
Inequality to deepen, despite upward social mobility trend in Oman
Successful strategies need to focus on the lowest income groups
Large-scale income disparities across MEA region
Gap to shrink by 2040 amid rural consumer expenditure growth

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
Tunisia : 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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