In the past ten years, Africa has witnessed a decline of approximately 20,000 individuals who can be classified as millionaires. This decline can be attributed to the migration of the continent’s ultra-wealthy population or the significant depreciation of their wealth due to currency fluctuations.
According to a report conducted by Henley & Partners, the number of individuals with a net worth of $1 million or more has decreased by 8% since 2013, leaving only 135,200 individuals in this category. Additionally, the report reveals that Africa is home to 342 cent millionaires and 21 billionaires, contributing to a combined wealth of $2.5 trillion among these affluent individuals.
“Currency depreciation and underperforming stock markets have chipped away at Africa’s wealth compared to global benchmarks,” Dominic Volek, group head of private clients at Henley & Partners, said in the report. “With African stock markets underperforming against global peers, local property markets facing headwinds, and currencies depreciating against the dollar, African investors have seen their wealth eroded on multiple fronts.”
Also, the Head of Research at New World Wealth, Andrew Amoils, noted that African countries are also losing large numbers of HNWIs to migration which is eroding the continent’s wealth. “According to our latest figures, approximately 18,700 high-net-worth individuals have left Africa over the past decade (2013 to 2023),” he stated.
There are currently 54 African-born billionaires in the world, including one of the world’s richest, Elon Musk, but only 21 of them still live on the continent. This marks a decline from the 23 who resided in Africa last year.
The majority of these individuals have relocated to the UK, the USA, Australia, and the UAE. Some others have moved to France, Switzerland, Monaco, Portugal, Canada, New Zealand, and Israel.
Why The Ultra-Rich Are Moving Abroad
According to Dominic Volek, Group Head of Private Clients at Henley & Partners, currency depreciation and underperforming stock markets have chipped away at Africa’s wealth compared to global benchmarks.
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The South African rand fell 43% against the US dollar from 2013–2023. Currencies in most other African countries also performed poorly compared to the dollar over the past 10 years, with dramatic depreciations of over 75% recorded in Nigeria, Egypt, Angola, and Zambia.
Beyond this, several other reasons are contributing to the departure of African billionaires from the continent, including regulatory challenges, lack of adequate infrastructure, security concerns, and taxation policies.
Africa Economy And Its Multiple Challenges
Africa has encountered various obstacles in its economies in recent years, leading to financial and currency pressures. Factors such as COVID-19, increasing interest rates, and geopolitical conflicts have contributed to these challenges. South Africa, with a significantly higher number of affluent individuals compared to other African nations, has experienced a 20% decline in its millionaire population over the past decade. This decline can be attributed to issues such as logistical limitations, frequent power outages, and widespread crime and corruption within the country.
During that time, the South African rand has fallen 43% against the greenback and the FTSE JSE All Share Index has also trailed the S&P 500.
Egypt and Nigeria, which are home to the next highest number of rich people after South Africa, have been grappling with runaway inflation, foreign exchange shortages, and multiple currency devaluations to allow their local units to trade more freely.
Africa’s millionaire population is projected to increase by 65% in the coming decade, despite the obstacles. The rise in wealth will be primarily fueled by significant growth in Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda, all of which are anticipated to see a minimum of 80% growth in millionaires, as stated in the report.
“Mauritius, with its stable governance and favorable tax regime, is projected to experience a remarkable 95% growth rate, positioning it as one of the world’s fastest-growing wealth markets,” the report said. “Namibia, too, is poised for impressive high-net-worth growth.”
