Mauritius leads African per capita wealth with SA second and Namibia third
The total private wealth currently held on the African continent is US$2.1 trillion and is expected to rise by 38% over the next 10 years, according to the latest 2022 Africa Wealth Report, published by Henley & Partners in partnership with New World Wealth.
The new Africa Wealth Report was released on Tuesday 26 April 2022.
It reveals that Africa’s ‘Big 5’ private wealth markets — South Africa, Egypt, Nigeria, Morocco, and Kenya — together account for over 50% of the continent’s total wealth. There are currently 136,000 high-net-worth individuals (HNWIs) with private wealth of US$1 million or more living in Africa, along with 305 centi-millionaires worth US$100 million or more, and 21 US dollar billionaires.
Despite a tough past decade, South Africa is still home to over twice as many HNWIs as any other African country, while Egypt now has the most billionaires. Mauritius has the highest wealth per capita in Africa, at US$34,500 per annum followed by South Africa at US$10,970 and Namibia at US$9,320.
Some of the fastest growing markets globally
Now in its seventh year, the Africa Wealth Report is the continent’s annual benchmark for private wealth providing a comprehensive review of African wealth, including trends among HNWIs, the luxury market, and wealth management.
Andrew Amoils, Head of Research at New World Wealth, explains that private wealth refers to an individual’s total assets (property, cash, equities, and business interests) less all liabilities. “Africa is home to some of the world’s fastest growing markets, including Rwanda, Uganda, and Mauritius. We forecast private wealth growth of over 60% in all three countries in the next decade, driven by especially strong performance in the technology and professional services sectors.”
Dominic Volek, Head of Private Clients at Henley & Partners, the leading global residence and citizenship advisory firm, adds that there are already several well-established wealth hubs on the continent, including South Africa, Egypt, and Morocco, which host sizable HNWI populations. “Strong growth in private wealth of over 50% is also predicted in Kenya, Morocco, Mozambique, and Zambia over the next 10 years. HNWIs in Africa are extremely mobile and their movements provide valuable insights into future economic trends in each country.”
Mauritius – an Indian Ocean powerhouse
According to the 2022 Africa Wealth 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 over 8,000.
South Africa – home to Africa’s wealthiest cities
In general, South Africa’s performance over the past decade has been poor, with total private wealth declining by 12% from US$739 billion in 2011 to US$651 billion in 2021. However, as Amanda Smit, Managing Partner of Henley & Partners South Africa, points out, the country still 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 poor a country is performing today, one thing has become very clear in our new Age of Uncertainty — governments and investors alike must focus on building resilience.”
Africa’s two wealthiest cities are in South Africa — Johannesburg is the wealthiest with total private wealth of US$239 billion, while Cape Town in second place has total private wealth of US$131 billion. Cairo follows closely behind with US$128 billion and Lagos is 4th with US$97 billion.
South Africa is also home to the largest luxury market in Africa by revenue, followed by Kenya and Morocco. South Africa’s luxury sector which includes exclusive hotels and lodges, cars, clothing and accessories, watches, private jets, and yachts generates revenue of approximately US$2 billion per year, making it the largest on the continent by a substantial margin.
African investors choose investment migration as a wealth and legacy management tool
Stuart Wakeling, Head of Henley & Partners Nigeria, says Covid, climate change and conflict, including the war in Europe, are currently key drivers of investment and wealth migration. He comments in the Africa Wealth Report that “in addition to the traditional benefits of enhanced global mobility, for the African investor, residence and citizenship by investment programmes offer a proven diversification strategy in terms of wealth and legacy management and domicile optionality, and many programmes also include the option to invest in real estate, which itself has multiple yields”.
Volek concludes, “The appeal of investment migration for affluent families is truly universal due to its many benefits, ranging from domicile diversification to global mobility enhancement, to accessing world-class education and healthcare, to having a plan B in times of turmoil. No matter where you were born, or where you currently reside, wealthy investors can futureproof themselves and their families for whatever might lie ahead through investment migration.”