SA’s private wealth declines 12% over the past 10 years

PRIVATE wealth held in South Africa has declined 12 percent since 2011 to date, although the African continent’s most sophisticated economy is still home to the two wealthiest cities – Johannesburg and Cape Town – and a luxury market that generates $2 billion (R31.5bn) in revenue each year.

The South African private wealth performance “has been poor” over the 10-year period under review, noted The Africa Wealth Report published on Tuesday by Henley & Partners and South African wealth intelligence firm, New World Wealth.

Despite this, Amanda Smit, a managing partner at Henley & Partners, noted South Africa still ranked number 28 in the world when it came to private wealth, ranking ahead of major economies such as Argentina, Malaysia, Thailand and Turkey. In Africa, South Africa is still a top private wealth hub.

“South Africa is also home to the largest luxury market in Africa by revenue, followed by Kenya and Morocco,” said the report. “South Africa’s luxury sector, which includes exclusive hotels and lodges, cars, clothing and accessories, watches, private jets, and yachts, generates revenue of approximately $2bn a year, making it the largest on the continent by a substantial margin.”

Johannesburg, adjudged as the wealthiest city in Africa, had total private wealth of $239bn, while Cape Town had total private wealth of $131bn.

Cairo, the Egyptian capital, followed closely in third position, with $128bn privately held wealth, while Lagos, capital to Africa’s biggest economy of Nigeria, is in fourth position with $97bn.

In terms of investment, it is as much as $80bn in “assets under management in the main wealth management hub in Africa of South Africa”, added the report.

South Africa’s large luxury market in Africa by revenue was followed by Kenya and Morocco.

“Much of this revenue is generated from the sale of luxury foreign brands such as Porsche and Louis Vuitton. South Africa is still home to more than twice as many high-net-worth individuals as any other African country, while Egypt now has the most billionaires,” said the report.

Strong growth is projected in Africa’s private wealth sector, amounting to 50 percent over the next 10 years for countries such as Kenya, Morocco,

Mozambique and Zambia.

This showed that high net worth individuals from the continent “are extremely mobile”, with their movements helping to provide “valuable insights into future economic trends” for their respective countries.

While a large number of South African billionaires have left the country over the past 10 to 20 years, as there are 15 South African-born billionaires settled elsewhere in the world, only five of them still live in South Africa.

However, “there is a trend of wealthy people returning to South Africa, in particular from the UK”.

The report also highlighted financial and professional services, real estate and technology and telecoms as the biggest sectors in which South Africa’s richest persons are invested.