Generally, African consumers feel optimistic about the future. This is according to Boston Consulting Group’s (BSG’s) 2013 Africa Consumer Sentiment Survey, which found that almost 90% of African surveyed said they are positive about the future. This is well above the global average of 54%.

Despite this optimism, however, many also feel at risk: 43% of African consumers either believe that they are in financial trouble or do not feel financially secure, compared with just 13% of consumers in India and 12% in China. As a result, many Africans are saving for an “unexpected future” – building financial cushions to have cash available for events that they can neither control nor plan for. From 32%-59% of respondents said they’re putting aside money in case of an emergency – a top reason for saving in other parts of the world as well.

In many African countries, savings as a percentage of monthly income are comparable with those in developing economies such as Brazil, China and India, although savings rates vary across Africa and were less pronounced in North Africa. Moreover, fewer Africans are saving to purchase a home, car or other big-ticket item compared with consumers in other developing economies.

Examining each African nation individually, striking differences emerged. At the time of the survey, consumers in Egypt were the least bullish on the future, with only 66% feeling somewhat or very optimistic. They also reported the lowest savings rates, which is not surprising given the extreme uncertainty during the civil unrest in 2013, when many people were likely spending to acquire basic necessities rather than saving. Meanwhile, more than 70% of consumers in Angola reported some degree of financial insecurity, despite savings rates that are higher than average. Ghana had the highest savings rate, with 81% of respondents claiming that they save more than 5% of their income.

Although they’re putting money aside for a rainy day, African consumers are also eager to spend. Quite simply, buying makes them happy. More than 80% of the people interviewed said the ability to buy new things brings them happiness, compared with slightly more than 70% in other developing nations – such as Brazil, China, and India – and less than 60% in developed countries.

According to the survey, 60%-90% of consumers in each of the eight African countries visited expressed a strong desire to buy more things every year – again higher than the averages in Brazil, China, and India, and twice the percentage of consumers in developed nations. Like consumers in other developing countries, Africans are beginning to embrace consumerism, with 65% agreeing that the desire and ability to buy products move the economy and culture forward. In contrast, only 30% of African consumers said they already have enough things – a much lower percentage than in other developed and developing nations. This suggests a pent-up demand for new products and services.

The demand for durable goods

It’s not surprising, then, that the majority of respondents in Africa said they intend to spend more over the next 12 months, and those expenditures are planned mostly for durable goods such as apparel, cars, and consumer electronics rather than on perishable food and grocery items. The people interviewed plan to spend more on clothing, cars, baby and toddler products, and mobile electronics, and to reduce their spending on restaurant and take-out meals, chocolates and candy, and alcoholic beverages.

Variations across countries are striking. Angola is the only nation where more consumers plan to decrease rather than increase their total spending. There, consumers are planning to spend less across all categories except clothing, with the majority cutting back on healthcare, chocolates and candy, and snack foods. In contrast, South Africa has the highest number of consumers planning to increase their total spending in all categories – although the increase is greater for durable, non-grocery items and lesser for breakfast foods, packaged food, and beer. Consumers plan to spend more on healthcare over the next year in Algeria, Egypt, Kenya, and South Africa but less in Angola and Ghana.

The increasing number of middle-class consumers is well documented. But often overlooked are the low-income and bottom-of-the-pyramid consumers who also shop and are already buying and willing to trade up for international brands. In fact, the total number of consumers who are likely to buy any given product may be larger than many companies believe.

Taken together, these findings bode well for companies targeting African markets. According to BSG’s research, highly optimistic consumers are more likely to spend, although consumers in Angola and Egypt may be less open to making discretionary purchases. Overall, however, the market for new products and services in specific African nations appears especially attractive as new consumer classes emerge.

This is an excerpt from Understanding Consumers in the “Many Africas”, written by Stefano Niavas, Lori Spivey, Mia von Koschitzky Kimani, and Garett Chau and published by the Boston Consulting Group.