Millions of Africans are trapped in poverty. However, due to an abundance of natural resources, minerals and oil, sub-Saharan economies are flourishing. The region is among the fastest growing economies in the world. Regardless, wealth is concentrated in the hands of a few, people known as “Black Diamonds.”
For decades the African elite made their shopping rounds in far off places like Paris, London and New York City. Now, according to a report from Merrill Lynch and Capgemini, Africa exhibited the fastest growing population of high-net-worth individuals in the world between 2009 and 2010. In recognition of the sudden rise in disposable incomes, malls featuring luxury brands began sprouting up – Sandton City in Johannesburg, The Palms in Lagos Nigeria, Sea Plaza in Dakar Senegal, etc. Luxury brands like Louis Vuitton, Hugo Boss and Hermés to just name a few are now ramping up their presence in Africa and targeting the growing number of affluent professionals. They label their target market “Black Diamonds.”
Africa is also witnessing the emergence of “Black Diamond Wannabes,” consumers that are buying luxury goods as a status symbol despite the fact they cannot afford these items. Consequently, debt levels in South Africa have gone through the roof. Despite the country having the continent’s number one economy, the South African central bank just reported that household debt stands at 75 percent of disposable income. Note: South Africans spend on average 7 percent of their disposable income just servicing their debts.
“Black Diamonds” and overwhelming poverty make for a flawed continent.
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