Steep rise in wealthy Africans Rich whites drop by 13%

THE NUMBER of African dollar millionaires in South Africa has increased by more than 100 percent in the past seven years.

This is according to a new research by the South African 2015 Wealth Report published yesterday.

The report claimed that while the number of African high net-worth individuals (HNWIs) rose from 2 300 in 2007 to 4 900 this year, their white counterparts have dropped by 13 percent during that time from 36 900 to 32 100.

HNWIs are defined as an individual with wealth of $1 million or more.

“According to our research, there were 14 700 South African HNWIs from previously disadvantaged groups at the end of 2014, which equates to 31 percent of South Africa’s total NHWI population,” states the report.

Financial services

Indian, Asian and coloured HNWIs totalled 9 800 last year or 21 percent of the total while African HNWIs were 4 900 or 10 percent of the total.

“There is a relatively low percentage considering that these groups make up 90 percent of the national population,” the report said.

“However, it should be noted that their volumes have risen strongly over the review period, particularly the Indian/Asian category,” the report added.

Econometrix economist Azar Jammine said the increase in the number of Indian dollar millionaires could be attributed to the improved education levels and benefit from black economic empowerment policies.

“With increased education the Indian race group is in short supply but is reaping huge benefits in terms of not being discriminated against in black economic empowerment and affirmative action.”

The SA Wealth Report claimed that the financial services had the largest number of millionaires at nearly 20 percent of the total, followed by the estate and construction industries at 16.2 percent of the total. The industries with a small amount of wealthier people are manufacturing, media, hospitality and oil and gas.

Jammine said that the figures showed that the manufacturing and mining industries were no longer as attractive as before. “That is the function of the way the economy is moving and how little money is being made in those industries.

“It shows just how basic materials are becoming less and less attractive to investors.”

Nearly 40 percent of the HNWIs belong to the 51 to 60-year age group followed by the 41 to 50-year age group who make up 28 percent of wealthy people.

White people still constitute the largest number of HNWIs in South Africa at 69 percent.

Jammine said the decrease was due to an increasing number of white people emigrating, with many of them skilled and educated.

The report shows that Johannesburg was still home to more than half of all HNWIs, followed by Cape Town at nearly 20 percent.

But it notes that Durban showed the fastest HNWI growth at 30 percent.

In terms of religion, Christians continue to dominate the numbers at more than 60 percent followed by Muslims at 11 percent and Hindus at 9 percent. “The Muslims were the fastest-growing millionaire group over the period, with their volumes rising by nearly 190 percent,” the report says.