Africa’s ultra-rich fleeing continent as economic woes bite
THE number of millionaires living in Africa dropped by nearly 20 000 in the past decade as the continent’s ultra-rich either moved away or saw dramatic currency depreciations eat away at their wealth.
There are now just 135,200 individuals with wealth of US$1 million or more, an 8 percent decline from 2013, according to a report by Henley & Partners. Along with the continent’s 342 centimillionaires and 21 billionaires, those individuals have total wealth of US$2.5 trillion, the consultancy found.
“Currency depreciation and under-performing stock markets have chipped away at Africa’s wealth compared to global benchmarks,” Dominic Volek, group head of private clients at Henley & Partners, said in the report. “With African stock markets under-performing against global peers, local property markets facing headwinds, and currencies depreciating against the dollar, African investors have seen their wealth eroded on multiple fronts.”
Africa’s economies have faced multiple challenges over the past decade that have put strain on their budgets and currencies, from Covid-19 to rising interest rates to geopolitical tensions. South Africa, which has more than twice as many wealthy individuals as any other African country, has lost 20 percent of its millionaires over in the last 10 years as the country battled logistics constraints, rolling blackouts and endemic crime and corruption.
During that time, the South African rand has fallen 43 percent against the greenback and the FTSE JSE All Share Index has also trailed the S&P 500.
Egypt and Nigeria, which are home to the next highest number of rich people after South Africa, have been grappling with runaway inflation, foreign-exchange shortages and multiple currency devaluations to allow their local units to trade more freely.
Despite all the challenges, Africa’s millionaire population is expected to rise by 65 percent in the next decade, according to the report. The gains will be driven by a surge in wealth in Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda, which are all expected to experience at least 80 percent millionaire growth, the report said.
“Mauritius, with its stable governance and favorable tax regime, is projected to experience a remarkable 95 percent growth rate, positioning it as one of the world’s fastest-growing wealth markets,” the report said. “Namibia, too, is poised for impressive highnet-worth growth.” —