Zitto na Demokrasia

Zitto na Demokrasia

Who is the Middle Class? Who is the Middle Class in Tanzania?

with 12 comments

 

Who is the Middle Class?

There is a general consensus that the emergence of middle class in societies is instrumental in the promotion of democratic culture and economic growth. However, conceptualizing what entails a middle class has never been a simple black and white exercise. The question remains, who is the middle class?

Economics and social sciences literature does not give a single definition of middle class. Different scholars define middle class from different angles based on their empirical preferences. Generally, Economics scholars define middle class from income and consumption approach and social scientists look at it as a social class phenomenon based on access to socio-economic services. Consequently, there is no single definition of middle class. This leads to different interpretations and confusions among policy makers and to the public in general as to what entails a middle class.

The social approaches to middle classs focus on factors such as levels of education, access to health services, and occupations of an individual. In his Wall Street Journal article (July 5-7, 2013), Francis Fukuyama, a social scientist, argues that ‘middle class is better defined by education, occupation and ownership of assets….’

Banerjee and Duflo (2007) define middle class on the consumption basis arguing that middle class composes of people with daily expenditures between $2 to $10. Benerjee and Duflo also link middle class to democratic values and economic growth through spending on goods and services.

The World Bank and African Development Bank (AfDB) also define middle class based on the consumption approach. Both Banks maintain that Africa’s middle class is composes of people who spend between $2 to $20 a day (i.e. their Purchasing Power Parity falls between this range). With this definition, it is estimated that 12% of the Tanzanian population falls under the Middle Class. The AfDB further argue that 34% of Africa’s population is now middle class. Thus showing that Tanzania is below African average.

Who is the Middle Class in Tanzania then?

According to ‘Deloitte on Africa’, a middle class person has characteristics like living in urban area, higher level of tertiary education, salaried job or small business owner, fewer children, interested in welfare of his/her family (education and health) and aspirational. 5.5 millions Tanzanians fall under this category, more or less, depending on where he/she falls between earning/spending $2 to $20 a day.

However if you consider data from Tax Authorities and Pension Funds these numbers can be questioned. According to Tanzania Revenue Authority report to Parliamentary Public Accounts Committee (PAC), there are around 1 million Tanzanians who pay taxes. There are also around 0.8 millions with driving licenses (hence with TIN numbers). Data from Economic Survey shows around 1.1m Tanzanians being registered with one of the Pension Funds. NSSF, the only Fund with Health Insurance scheme, has around 0.6m members. Members of Pension Funds are mostly salaried workers and the numbers seem to tally with those of TRA as tax payers because, tax payers are either salaried workers or entrepreneurs. In light of the above data from TRA and Pension Funds, it can be concluded that the Middle Class Population in Tanzania is around 1.5 million.

If we include people who are neither members of Social Security Fund nor in possession of TIN such as tax dodgers and successful peasants, there will be many more people in Tanzania with a middle class income without having characteristics of one- in particular the social factors.

Recently, as I was driving along Ocean Road (now Barack Obama Drive) approaching Palm Beach, the traffic was heavy so cars were moving slowly. I saw a young woman selling fresh cassava. I called her to buy one piece. The piece was very delicious and I ordered a second piece. As she was preparing my second piece I decided to pull over and talk to her. Her name is Salima. Salima wakes up each day at 5 am, sends her 4 years old son to her mother, and walk to catch a Ferry from Kigamboni then a bus to Buguruni to buy cassava. From 8 am to 6 pm she literary walks almost all over Dar City selling her products. She explains that ‘In good days I get up to Tshs. 18,000 (US$11.1) profit from capital of Tshs 30,000 (US$18.5). On bad days I get Tshs 6,000.’ On the worst days, City Council’s paramilitary (mgambo wa jiji) confiscates all her cassava and even beat her up, and she loses everything.

I figured out that she makes an average of Tshs 10,000 (US$6.2) a day from her Tshs 30,000 (US$18.5) daily capital. I asked her if she saves. No, was her answer, except that she participates in UPATU (a merry-go-round arrangement) with fellow women in Kigamboni area where she lives. She doesn’t have social security as well. She pays rent of 15,000 (US$9.25) a month for her single room. The house has no electricity but it has running water! It is Dar es Salaam, not Kalinzi in Kigoma – 50% of houses in Dar es Salaam do not have electricity.

Based on the definitions above, Salima is a middle class as she earns more than $7 a day. But Salima doesn’t fit into Deloitte on Africa characterization of a middle class. Salima’s income a month is more than a basic salary of a primary school teacher starting to work. But Salima doesn’t have social security (hence health insurance), she walks around ten hours a day, and lives in a single bedroom without electricity.

I took that opportunity to educate Salima on the importance of social security, especially health insurance for herself and her son. We agreed that she will be saving Tshs. 1000 (US$0.62) every day for her membership to NSSF (Tshs 30,000 (US$ 18.5) a month). She got registered with NSSF few days after and everyday she sends to me Tshs 1000 (US$0.62) through M-Pesa for me to pay her monthly contributions to NSSF. I have paid her contributions 3 months in advance already. She now has social security including health insurance. Does that make her middle class?

Salima lives in Dar (urban), she is young with one kid, owns her business and now has health insurance. But Salima’s education is primary, and as to the time I talk to her first, she wasn’t aspirational. She simply survives. I did not ask if she votes, or for  her views on democracy.

Is Salima middle class?

Who is the middle class in Tanzania?

Written by zittokabwe

July 8, 2013 at 5:06 AM

12 Responses

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  1. Daaaah’ that’s a very trick Question.

    Ommy

    July 7, 2013 at 8:50 AM

    • Kama salima falls into middle class, than probably more than 50% ya wa TZ ni wako kwa Middle class..

      Innocent

      July 7, 2013 at 9:49 AM

  2. A middle Class is one who can run life with security, having a social economic network for daily life security.

    SANDE

    July 7, 2013 at 9:23 AM

  3. Nice piece brother,brings back memories of clash of civilisation(s) by samuel huntington or my favourite qoute by Dr Waffa Sultan”The clash we are witnessing around the world is not a clash of religions, or a clash of civilizations. It is a clash between two opposites, between two eras. It is a clash between a mentality that belongs to the Middle Ages and another mentality that belongs to the 21st century. the clash we are witnessing in Tanzania today is the clash of the formal and informal. im formal(according to the west) and salimia is informal. similar to wearing a suit or a kanzu to August House.some say tomato others say tometo

    joe

    July 7, 2013 at 10:27 AM

  4. awesome topic. about the answer mmhhhh……

    frank shedrack

    July 7, 2013 at 11:18 AM

  5. While judging Salima, whether she in in a middle class economic status, we should be consistent on the parameters of the middle class. As you have quoted the definition of different scholars on your introduction part, middle class had been being judged basing on the levels of eduction, consumption rates and asset ownership as seen by Fukuyama. Benerjee sees middle class on the angle daily consumption of Tshs 3,200 up 16,000. The World Bank, on its definition, conquers with that of Benerjee. Deloitte looks at place of domicile whether someone lives in urban or village, level of education, number of children, interest in family education etc.
    On your judgement of whether Salima should be judged as a middle class you seem not basing on the definitions aforesaid above by different scholars that you have quoted. You have said Salima earns 6,000 per day. Is this an expenditure? Should we say income is always equal to expenditure. No scholar mentioned above have defined middle class on their level of income. Where do you get this assumption? Nowhere in the reference above has assumed middle class on only one parameter. It should be, I presuppose, better when looking at Salima, to include also other factors and only her income through cassava business. Although Deloitte, in his definition has considered small business as one of the parameters, but we should also look at what is the operational definition of a small business. Then we could be on a state of knowing whether Salima’s cassava business is included on the definitions.
    To conclude on my side, Salima is under poverty line

    asungwile

    July 7, 2013 at 11:39 AM

    • Asunguliwe…remember the article mentions that Salima doesnt save anything…so it’s means she consumes/spends all that she earns, which falls on the Banks & Benerjee & Duflo definitions.
      The argument here is that it’s not easy to categorize a middle class. May be as Tanzanians we should define what constitute a middle class based on our context and then categorize people…its not even easy to say whether Salima or a primary school teacher are middle class or not.

      Aikande

      July 7, 2013 at 12:41 PM

    • Asungwile
      AfDB and WB uses consumption and income approach interchangeably. But also saving factor must be taken into consideration

      Zitto

      July 8, 2013 at 11:24 PM

  6. People who on a regular basis are able to spend their money in order to sustain their needs and wants without creating debts fall into this category of the Middle Class. In Tanzania to be precise, the middle income class of people could include all those people who are financially able to engage in regular spending habits on their wants on top of their basic needs. This group enables businesses of all sorts to run smoothly & sustainably, thus promoting a healthy and a vibrant economy. In a society where people spend only on their basic needs, there will be a problem. It’s difficult for any heterogenous business environment to emerge, because people are only striving to survive, a good example could be salima whom you sighted in your article, she does not belong in the middle class because she only strives to survive, and can even hardly meet her basic needs). So, by gauging people’s behavioural trends on their purchasing habits, one can get an overall picture of where to position a certain group of people.

    Frank®™ (@rank01)

    July 7, 2013 at 2:06 PM

  7. Great debate. more questions though, can we have a country specific definition of a middle class? Do we have to? Do we have a minimum standard of living that we wish each and every Tanzanian to have?
    We have a record growth of our economy for the last 10 years, but ‘who really benefit from this growth’? I think our economic growth widens inequality. Gini coefficient shows .35 which is not very bad. May be we have wrong methods of collecting our statistics

    Zitto

    July 8, 2013 at 11:23 PM

  8. Excellent and thought provoking. Thank you for this well written, thoughtful article.

    Kitty Fogliano

    August 12, 2013 at 3:04 PM

  9. […] interessanter Blog-Eintrag über eine Straßenverkäuferin habe ich nun bei dem Oppositionspolitiker Zitto Kabwe gefunden. Er […]


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