THE number of millionaires in Africa has decreased by nearly 20,000 in the last ten years, as the continent’s ultra-rich either relocated or suffered from significant currency depreciations. According to a report by Henley & Partners, there are now 135,200 individuals with wealth of $1 million or more, representing an 8 percent decline from 2013. Alongside the continent’s 342 centimillionaires and 21 billionaires, these individuals collectively possess a total wealth of $2.5 trillion.
‘Currency depreciation and underperforming stock markets have chipped away at Africa’s wealth compared to global benchmarks,’ said Dominic Volek, group head of private clients at Henley & Partners. He pointed out that African investors have faced multiple challenges, including local property market headwinds and currencies depreciating against the dollar, which have collectively eroded their wealth.
Over the past decade, Africa’s economies have been hit by various challenges, ranging from the Covid-19 pandemic to rising interest rates and geopolitical tensions. South Africa, which boasts more than twice as many wealthy individuals as any other African country, has lost 20 percent of its millionaires in the last ten years. The country has grappled with logistics constraints, rolling blackouts, and endemic crime and corruption. During this period, the South African rand has depreciated by 43 percent against the US dollar, and the FTSE JSE All Share Index has underperformed compared to the S&P 500.
Egypt and Nigeria, home to the next highest number of wealthy individuals after South Africa, have also faced severe economic issues, including runaway inflation, foreign-exchange shortages, and multiple currency devaluations to enable freer trade of their local units.
Despite these challenges, the report forecasts a 65 percent increase in Africa’s millionaire population over the next decade. This growth is expected to be driven by a surge in wealth in countries like Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda, all of which are projected to experience at least 80 percent growth in their millionaire populations.
‘Mauritius, with its stable governance and favourable 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 noted. ‘Namibia, too, is poised for impressive high-net-worth growth.’
As Africa continues to navigate its economic challenges, these projections offer a glimpse of a potentially prosperous future for the continent’s wealthy elite.
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