How Africans Spend Money Vs. The Rest of the World
For many Africans the term, “You only live once,” means something else entirely. While it is a quote meant to spur one into action given how short life is, in Africa, it is an order to spend, party and eat as lavishly as possible before one dies. Well kind of.
You see, Africans are pragmatic with money. They believe it has to be made but they also believe it has to be spent. There even an adage that supports that; “what you eat is what you really own”. Another version will say, “What you eat is what you take to the grave”. So how does Africans generally spend money compare with most other parts of the world? You will find out in this article.
Sub-Saharan Africa has the lowest savings rate in the developing world. While figures vary from country to country, gross domestic savings in the region averaged about 18 per cent of gross domestic product (GDP) in 2005 and has continued to decline since then. In contrast, Southeast Asia has a 26 per cent savings rate while East Asia and Pacific countries have 43% according to World Bank estimates. Statistics show the number of saving in the continent has continually declined since the 1980s. Africans mostly save when there is a project they want to embark on. Otherwise, they are happy to put their money where their mouth is literally.
Ever watched a Hollywood movie and wonder how the actors barely finished, what was already, a quarter square-meal? We know they exaggerate those quickie eating scenes. But if there is one thing to know about most Africans, as diverse as the continent is; it is that they don’t joke with food.
Yes! Rich, middle and lower class Africans love food. The top three spenders on food in the world are all African countries. According to Eurostat, Nigerians spend a whopping 58.9% of their incomes on food. Kenyans spend 52% with Cameroonians rounding off the top three 45%. In contrast, the USA, Singapore and the UK spend the least on food at 6.4%, 6.7% and 8.2% respectively. We can argue that this is as a result of low average incomes in the region. But eating to stomach-fill is a sign of living a good life in this part of the world.
Africans spend quite a lot on Education. In 2018 Nigerians spent half a billion dollars on educating their wards in the USA alone, the highest of any African country by far. However, there is a catch to this spending. While Americans and Europeans generally spend their money on education to study courses they are passionate about, Africans spend money to study courses they believe will earn more money and help keep poverty at bay. In other words, African parents are more likely to spend their entire savings on their wards to get the best education when it is for courses like Medicine, Engineering or Law. On the other hand, they are less likely to invest much money into one’s education when it’s for courses like Music, Theatre Arts or History. Those ones are considered a waste of time and resources.
In most parts of the world, weddings are more of a low-key event, with few friends and family involved. In Africa, a wedding is probably the biggest party you’ll ever throw. It can also be one of the most expensive days of your life. Africans love big occasions and prepare appropriately for each one. Preparation can begin as much as six months in advance. From paying bride prize and fulfilling the list of items to be presented to the bride’s family as part of the traditional wedding; to preparing for the wedding proper. African weddings are almost like a mini carnival and it is among the many occasions people get the chance to show off their wealth. Just ask a single African man in his late thirties why he is yet to get married, and you are likely to get one of two answers; ‘I’m yet to find the right one’ or ‘I am yet to save up enough for the wedding.’
In Africa, no-wedding is considered better than a poor-wedding. Money is lavished on a grand reception venue, food, drinks, cake, different costumes, souvenirs and many more. Kenyans are said to currently spend the most on weddings. According to a 2018 survey by Samantha Bridals, the average cost of a wedding in Kenya is about $34,854. However, the report also reveals that many couples try to stick to a budget of $14,900 or under.
Sometimes, the difference between burials and weddings in Africa is that there is a coffin at one and not at the other. Otherwise, most other things are pretty much the same. Remember what we said earlier about African’s saving up for projects? Guess what? Burials are one of such projects. Without savings, some Africans will take bank loans to fund lavish burials for loved ones. They call it “Celebration of life”.
A study in Kenya found that 63% of households that declined into poverty in rural areas cited heavy funeral costs as a cause. In Cameroon, some people opt to save for a funeral rather than contribute to medical costs while the person is still alive. This has prompted the sentiment that in some countries, more attention is given to a person in death than in life. Perhaps the part of Africa that hosts the most unique and spectacular burials is Ghana. Caskets used in this part of the continent are very unique and colourful. They usually represent the deceased’s profession or favourite object. This could range from an aircraft shaped casket to a pencil or coca-cola bottle, a shoe or an animal.
Ghanaians spend as much as $15,000 to $20,000 on funerals. In contrast, countries in the far east and urban parts of Europe just cremate their dead or bury them in a cemetery with little or no ceremonies.
Money is different things to different cultures and is treated accordingly. Africans work almost twice as hard only to make half the money their colleagues in other parts of the world make. When they finally earn this money, they want to enjoy the fruit of their labour. Perhaps the reasons Africans spend more and save less isn’t just driven by gluttony or financial recklessness but by the need to reward their efforts.
What are your thoughts about these spending cultures in Africa? What other money spending habits do you identify to be common in your country? Please share with us in the comment section.