Business, Economics and Jobs

What Starbucks really tells us about sub-Saharan Africa

starbucks_logo.jpg

Starbucks logo.

Credit:

KAREN BLEIER

Admittedly, when you hear "sub-Saharan Africa," you probably don't think: "Starbucks." But hey. Places change. Sub-Saharan Africa has been changing for quite some time. 

On Tuesday, Starbucks announced its plan to open shop in Johannesburg come 2016. That will be the first Starbucks in sub-Saharan Africa, though it certainly won't be the last. 

It remains to be seen whether the region, still home to many of the world's poorest countries, has the clientele to sustain Starbuck's aggressive expansion plans. But Bloomberg has the number of middle-class households (those consuming $15 to $115 a day) in sub-Saharan Africa growing to 40 million by 2030. There are 15 million now. So, Starbucks might not be such a stretch after all.

But those numbers alone don't paint the whole picture. There is a growing middle class in sub-Saharan Africa. There is also an increasing number of poor people. 

According to Brookings Institute, 2015 marks the 20th year since sub-Saharan Africa started on a path of faster economic growth. But during that same period of time, the number of people living in poverty (less than $1.25 a day) has continued to rise — 358 million in 1996 to 415 million in 2011, the last year for which they have estimates.

The reason why these diverging trends can co-exist, according to Brookings, has to do with a range of factors, including population growth, the already high rates of poverty in Africa and how deeply entrenched poverty is there.

So, Starbucks does tells us a latt-e about sub-Saharan Africa, but the whole story is always a bit more complicated.

Starbucks has about 22,000 locations worldwide and has been focused until now on expanding in places like China and India. Ironically, many of the beans used in Starbucks coffee originate in sub-Saharan Africa. So it's all a bit of a homecoming.