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Wealth among Africa’s richest set to soar in Rwanda, Uganda and Mauritius

Private wealth held in SA has declined by 12% in the past decade

26 April 2022 - 13:25 By TimesLIVE
Strong performance in the technology and professional services sectors in Rwanda, Uganda and Mauritius is forecast to see private wealth growth of more than 60% in the next decade. Stock photo.
Strong performance in the technology and professional services sectors in Rwanda, Uganda and Mauritius is forecast to see private wealth growth of more than 60% in the next decade. Stock photo.
Image: 123RF/EVERYTHING POSSIBLE

The total private wealth held on the African continent, estimated at $2.1-trillion (about R32.8-trillion), is expected to rise by 38% over the next 10 years.

This is according to the 2022 Africa Wealth Report, published on Tuesday by Henley & Partners in partnership with New World Wealth.

The report reveals Africa’s “Big 5” private wealth markets — SA, Egypt, Nigeria, Morocco, and Kenya — together account for more than 50% of the continent’s total wealth.

There are  136,000 high-net-worth individuals (HNWIs) with private wealth of $1m (about R15.6m) or more living in Africa, along with 305 “centimillionaires” worth $100m (about R1.5bn) or more, and 21 US dollar billionaires.

Egypt has the most billionaires.

Despite a tough past decade, the report states, SA is still home to more than twice as many HNWIs as any other African country.

Mauritius has the highest wealth per capita (average wealth per person) in Africa, at $34,500 (about R539,000), followed by SA at $10,970 (about R171,000) and Namibia at $9,320 (about R146,000).

Andrew Amoils, head of research at New World Wealth, said private wealth refers to all an individual’s net assets (property, cash, equities and business interests) less any liabilities.

Top African countries to watch

“Africa is home to some of the world’s fastest growing markets, including Rwanda, Uganda and Mauritius. We forecast private wealth growth of more than 60% in all three countries in the next decade, driven by especially strong performance in the technology and professional services sectors,” Amoils said.

“Strong growth in private wealth of more than 50% is also predicted in Kenya, Morocco, Mozambique and Zambia over the next 10 years,” said Dominic Volek, head of private clients at Henley & Partners, a global residence and citizenship advisory firm.

Mauritius leads

According to the report, Mauritius is the fastest growing wealth market in Africa, with projected growth of 80% over the next decade.

This will also make it one of the fastest growing high-income markets in the world over this period (in percentage growth terms), together with Australia, Malta, New Zealand and Switzerland. By 2031, HNWI numbers in Mauritius are expected to reach more than 8,000.

SA’s poor performance

In general, SA’s performance over the past decade has been poor, with total private wealth held in the country declining by 12% from $739bn (about R11.6-trillion) in 2011 to $651bn (about R10.2-trillion) in 2021, the report states.

Amanda Smit, managing partner of Henley & Partners SA, said the country ranks 28th in the world when it comes to private wealth, ahead of major economies such as Argentina, Malaysia, Thailand, and Turkey.

“No matter how well or poorly a country is performing today, one thing has become very clear in our new age of uncertainty — governments and investors must focus on building resilience,” she said.

“Preparing for the next shock is imperative, and one proven means of doing so is via investment migration, whereby investors can acquire and secure an alternative residence or second citizenship in a different jurisdiction in return for investing in a host country.”

Africa’s two wealthiest cities are Johannesburg, with total private wealth of $239bn (about R3.7-trillion), and Cape Town, which has total private wealth of $131bn (about R2-trillion). Cairo follows closely behind with $128bn (about R2-trillion) in privately held wealth, and Lagos is in fourth position with $97bn (about R1.5-trillion) in private wealth.

Spending power

SA is also home to the largest luxury market in Africa by revenue, followed by Kenya and Morocco.

SA’s luxury sector, which includes exclusive hotels and lodges, cars, clothing and accessories, watches, private jets, and yachts, generates revenue of approximately $2bn (about R31bn) a year, making it the largest on the continent by a substantial margin. Much of this revenue is generated from the sale of luxury foreign brands such as Porsche and Louis Vuitton.

Commenting in the report, CEO of MyGrowthFund Venture Partners Vusi Thembekwayo  said the ascent of new wealth economies, along with megacities and the diversification of wealth-creating sources, are just some of the exciting trends driving the creation and flow of capital across the continent.

“Africa’s story is one of polar domination, with the largest wealth management centres traditionally situated in the most extreme south — SA — and the most extreme north — Egypt and Morocco. The rise of frontier economies that are attracting new wealth by positioning themselves as preferred investment destinations is challenging this narrative. Mauritius and the Seychelles have recently been the most deliberate with this strategy.”

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