New data shows South Africa's ability to retain wealth declined by 25% over the last decade, while an estimated 4 200 High Net Worth Individuals have left the country.
This is according to the 4th edition of the Africa Wealth Report compiled by wealth intelligence firm New World Wealth and sponsored by Mauritius based banking group AfrAsia Bank. The report takes a comprehensive review of the wealth sector in Africa, including HNWI trends, luxury trends and wealth management trends on the continent.
And while South Africa is home to over twice as many dollar millionaires as any other African country, Egypt has the most billionaires on the continent. New World Wealth defines millionaires as those with a net worth of $1 million or more. The “Big 5” wealth markets in Africa are: South Africa, Egypt, Nigeria, Morocco and Kenya – together these five countries account for over 50% of Africa’s total wealth.
The number of millionaires living in South Africa continues to decline, with 365 00 dollar millionaires living in the country – down by 1 900 from the number recorded in 2020.
Included in South Africa’s millionaire figures are 1 930 multi-millionaires living in South Africa, each with net assets of $10 million or more. In addition, there are five billionaires living in South Africa, each with net assets of $1 billion or more. Click here to read the full report.
The report shows SA’s poor performance, with total private wealth held in the country declining by 25% over the past decade, when measured in US$ terms has been negatively impacted by:
- Significant loss of currency value vs. US$ from around 6.80 Rand per US$ in 2010 to 14.70 Rand per
US$ in 2020 (year-end rates). - A large number of local businesses closed down during the period, especially in the SME space.
- Poor returns from the JSE all share index (down by 12% over the past decade when measured in US$
terms). - The ongoing migration of wealthy people out of the country. Based on our estimates, around 4,200
HNWIs have left SA over the past decade (2010 to 2020). Most of these individuals have gone to the
UK, Australia and USA. Some have also gone to: Switzerland, Israel, Mauritius, New Zealand, the UAE,
Canada, Portugal, Spain, Cyprus and Malta. - A sluggish local prime residential market. In particular, homes valued at over R10 million (equates to
around US$700,000) have become very difficult to sell.
READ: High-end buyers snapping up SA's luxury properties at 'bargain' prices
The wealth and HNWI figures in the report are for December 2020 and take into account the impact of the recent coronavirus outbreak, as private wealth and HNWI levels in Africa have dropped by around 9% over the past year (2020).
The pandemic has had its impact with a "marked drop in salary levels and job losses mainly related to the virus outbreak and the related lockdowns. The travel, hospitality, manufacturing and real estate sectors have been most heavily impacted".
Other factors include:
- A large number of local businesses closed down during the year, especially in the SME space.
- The residential property market weakened, especially the prime (top-end) market.
- Rising household debt. Debt is subtracted when calculating net assets so this has a negative impact on private wealth.
The report forecasts that total private wealth held in Africa is expected to rise by 30% over the next 10 years, reaching USD 2.6 trillion by 2030. "This growth will be driven by strong growth in the billionaire and centi-millionaires segments, especially in fast growing economies such as Ethiopia, Mauritius, Rwanda, Kenya and Uganda."
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