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Over the next 10 years, the number of millionaires in Africa will reach 195,000 signaling a 42% increase from the current figures, the 2023 Africa Wealth Report has revealed. The report was compiled by Henley & Partners in partnership with wealth intelligence firm New World Wealth shows. Millionaires in Africa are currently estimated to be 138,000.
Mauritius is predicted to be the standout, with a 75% growth forecast for the next decade. The strong high-net-worth individual growth of 60%+ is also forecast in Namibia, Rwanda, Zambia, the Seychelles, the Democratic Republic of the Congo, and Morocco.
Rwanda was the top performing market in Africa during the 10 years, with millionaire growth of 72%, followed by Mauritius, Seychelles, Uganda, and the Democratic Republic of the Congo. Morocco and Kenya’s high-net-worth individual populations also grew solidly.
However, total high-net-worth individual numbers in Africa have fallen by 12% during the same period under review. Performance was constrained by poor growth in the three largest African markets, South Africa, Egypt, and Nigeria.
Ethiopia and Ghana, whose millionaire populations had been growing rapidly until 2019, have struggled over the past few years, which has pulled back their 10-year growth rates.
Meanwhile, approximately 18,500 high-net-worth individuals have left Africa over the past decade, with most relocating to the UK, the USA, and the UAE. Significant numbers have also moved to Australia, Canada, France, Israel, Monaco, New Zealand, Portugal, and Switzerland.
In terms of internal millionaire migration within the continent, approximately 1,200 high-net-worth individuals have moved between African countries over the 10-year period, with most relocating to Mauritius and South Africa.
Within 20 years, there are 52 African-born billionaires globally, of whom only 23 still live on African soil. This is a significant concern as many billionaires are entrepreneurs and company founders who therefore have the ability to create significant employment in their host countries.
“Billionaires rarely move for tax reasons. They usually relocate to expand their businesses or due to safety concerns,” the report noted.
The ‘Big 5’ wealth markets in Africa South Africa, Egypt, Nigeria, Kenya, and Morocco together account for 56% of Africa’s high-net-worth individuals and over 90% of the continent’s billionaires.
South Africa tops the list of the Top 10 wealthiest countries in Africa in terms of resident high-net-worth individuals by some margin. Mauritius’ high ranking is also impressive when considering its small size and population.
South Africa’s high centi-millionaire count is particularly notable. Centi-millionaires are typically the founders of large multi-national companies, making their presence in a country particularly valuable when it comes to creating employment.
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Interestingly, the report notes that approximately USD 150 billion of Africa’s high-net-worth individual wealth is tied up with wealth managers and private banks. Typically, wealth managers in Africa target individuals with over USD 500,000 in investable assets.
The African wealth management market is estimated to grow by an impressive 60% over the next decade, driven by strong assets under management (AuM) growth in most major markets
Access to education for children in super-wealthy families
Although Africa has a wealth of tertiary institutions, with over 270 universities in Nigeria alone, overseas universities continue to attract and produce a substantial portion of African high-net-worth individuals, especially in the top wealth bands.
The report notes that securing access to the best international education for their children has become a key motivation for African investors considering residence and citizenship by investment program options.
The report notes that more than 30% of Africa’s centi-millionaires completed their studies in just two countries — the UK and the USA. Most earned postgraduate qualifications such as MBAs and subsequently returned to Africa where they made their fortunes. Seven per cent of Africa’s centi-millionaires studied at the University of Cape Town, which is ranked as the top university in Africa.
Five per cent of Africa’s centi-millionaires attended the University of Oxford in the UK while four per cent of Africa’s centi-millionaires graduated from Harvard University in the USA.
Potential for growth in eco-tourism
The report draws attention to the popularity of eco pursuits among Africans, and particularly HNWIs.
“Although eco-tourism demands a more nuanced and intentional approach than regular tourism, the presence of top international hotel groups across the continent illustrates that players with deep pockets are already invested and are likely to take up the opportunity to enter this new space,” say the authors. “This of course does not preclude new homegrown entrants from investing in the sector or from partnering with established international hospitality chains.”
This underlines the potential for growth of the continent’s rapidly recovering tourism sector and its role as a significant employment creator, both internally and in the related food, services, and manufacturing sectors, says the report.