SA has wealthiest people in Africa

According to Wealth Statistics in Africa report by New World Wealth, South Africans are the wealthiest individuals in Africa with US$11 310 in wealth per person, while Ethiopians are the poorest with US$260 per person.

South Africans are the wealthiest individuals in Africa with US$11 310 in wealth per person, while Ethiopians are the poorest with US$260 per person.

Interestingly, North African countries Libya, Tunisia, Algeria, Egypt, Morocco all rank high on the list.

Andrew Amoils, wealth analyst, explains that the study analyses the wealth trends of individuals in each African country between 2000 and 2013, with specific focus on individual average wealth in each country in US dollar terms and compares this across countries.

However, notes Amoils, all these figures are well below the global average of US$27 600. Top ranked worldwide countries such as Switzerland and Australia have wealth per capita of over US$250 000, he points out.

South Africa’s wealthy individuals

Asked about what South African wealthy individuals assets are, he says in terms of the South African millionaires or High Net Worth Individuals (HNWIs), equities were the largest asset class in 2013 (28 percent of total HNWI assets), followed by real estate (20 percent), business interests (16 percent), cash (15 percent), fixed income (14 percent) and alternatives (6.6 percent).

Africa: Wealth per capita 2013

Source: NW-Wealth.com (numbers rounded to nearest 10 and refer to year end)

He says cash and fixed income products recorded the strongest growth over the review period (2007 to 2013), driven by a movement to safer assets during and after the 2008 global financial crisis.

Over the forecast period (2013 to 2017), equities are expected to be the top-performing asset class for HNWIs, followed by business interests and real estate.

Asked about what South African wealthy individuals assets are, he says in terms of the South African millionaires or High Net Worth Individuals (HNWIs), equities were the largest asset class in 2013 (28 percent of total HNWI assets), followed by real estate (20 percent), business interests (16 percent), cash (15 percent), fixed income (14 percent) and alternatives (6.6 percent).

Alternatives and cash will be the worst performing asset class, as a result, there will be a movement away from cash and towards equities, according to the report.

“Our research shows that 22 percent of South African HNWIs have second homes abroad in 2013 – and this figure is below the global HNWI average of approximately 30 percent.”

Their liquid assets amounted to US$53 billion in 2013, representing 26 percent of the wealth holdings of local HNWIs.

New World Wealth expects foreign asset holdings to reach US$46 billion by 2017 when they will account for 18 percent of total HNWI assets.

In 2013, Europe made up the largest share of the foreign assets of South African HNWIs at 39 percent followed by Asia Pacific (23 percent), North America (17 percent), Africa (13 percent), Latin America (5.7 percent) and the Middle East (2.3 percent).

“South Africans still invest most of their overseas money in Europe and North America.”

Other African countries constituted only 13 percent of South African HNWI foreign investments in 2013, however, this figure is increasing fast as it was at a low 7 percent in 2007, explains Amoils.  

Africa: Wealth per capita growth 2000-2013

Source: NW-Wealth.com

On how the Black middle class in South Africa compares to other African countries, he says SA has the largest middle class on the continent, followed by Egypt with Nigeria in third place.

He says cash and fixed income products recorded the strongest growth over the review period (2007 to 2013), driven by a movement to safer assets during and after the 2008 global financial crisis.

The South Africa Wealth Book 2013, also published by New World Wealth, reports as of 2013 there were over 48 700 HNWIs in South Africa with a combined wealth of US$200 billion, accounting for roughly 31 percent of South Africa’s total individual wealth (US$650 billion).

South African HNWIs outperformed the worldwide HNWI average during the review period (2007 to 2013), with South African HNWI numbers increasing by 14 percent while worldwide HNWI volumes declined by 0.3 percent.

“The rise in US dollar based HNWI wealth occurred despite a significant 30 percent depreciation of the Rand against the US dollar during the review period,” says Amoils.

HNWI growth was positively influenced by a rise in new business formation, particularly in the BEE arena, as well as solid local stock exchange returns and rising commodity prices.

He notes that growth in HNWI wealth and volumes will be solid over the forecast period as more new businesses are developed within the country.

“Over the four year forecast period, the number of South Africa’s HNWIs is forecast to grow by 28 percent, to reach over 62 400 in 2017 and their wealth will see a larger percentage increase, growing by 30 percent to reach US$259 billion in 2017.”

Economic growth in Africa

The report reveals that in terms of wealth growth, Angola has been the top performer in Africa since 2000 with growth of over 500 percent, followed by Namibia and Nigeria, while Zimbabwe was the worst performer.

Africa: Total Wealth 2013

Source: NW-Wealth.com

Angola has solid economic growth mainly due to a booming oil industry and other major drivers include a fast growing diamond mining, banking and construction industry.

Ownership rights in the country are also relatively secure, says Amoils.

Zimbabwe is again the worst performing country on the list and its economic position has weakened further in 2013. The new indigenisation plans are expected to bring GDP per capita down to below US$700 at the end of 2013.

Africa: GDP per capita growth 2000 -2012

Source: World Bank

Amoils says it is not surprising to see wealthy individuals in some North African countries because the region and specifically those countries such as Libya, Tunisia, Algeria, Egypt and Morocco are experiencing strong economic growth with a fast growing banking industry.

Many African countries also start from a low base which helps growth, he points out.

“Over the next 10 years, we expect the fastest growing African countries to be Ivory Coast, Zambia, Ghana and Ethiopia (in terms of wealth growth),” adds Amoils. - Denise Mhlanga