The total private wealth currently held on the African continent is $2,1-trillion and is expected to rise by 38% over the next 10 years,.
This is according to the latest 2022 Africa Wealth Report by Henley & Partners in partnership with New World Wealth.
It reveals that Africa’s “big five” 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 $1-million or more living in Africa, along with 305 centi-millionaires worth $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 (average wealth per person) in Africa, at $34 500, followed by South Africa at $10 970 and Namibia at $9 320.
The Africa Wealth Report is the continent’s annual benchmark for private wealth research and is now in its 7th year, providing a comprehensive review of the wealth sector in Africa, 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 all an individual’s net assets (property, cash, equities, and business interests) less any 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, 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.”
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.
In general, South Africa’s performance over the past decade has been poor, with total private wealth held in the country declining by 12% from $739-billion in 2011 to $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 poorly 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. Preparing for the next shock is imperative, and one proven means of doing so is via investment migration, whereby investors can acquire and secure an alternative residence or second citizenship in a different jurisdiction in return for investing in a host country.
“Last year was a record-breaking year for Henley & Partners, in which we assisted clients representing 79 different nationalities, including citizens of 15 African countries ranging from Algeria to South Africa, and from Liberia to Ethiopia.”
Africa’s two wealthiest cities are in South Africa – Johannesburg is the wealthiest, with total private wealth of $239-billion, while Cape Town in second place has total private wealth of $131-billion. Cairo follows closely behind with $128-billion in privately held wealth, and Lagos is in fourth position with $97-billion in private wealth.
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 $2-billion a year, making it the largest on the continent by a substantial margin. Much of this revenue is generated from the sale of luxury foreign brands such as Porsche and Louis Vuitton.
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 programs offer a proven diversification strategy in terms of wealth and legacy management and domicile optionality, and many programs also include the option to invest in real estate, which itself has multiple yields”.
Chidinma Okebalama, senior consultant at Henley & Partners Nigeria, adds that many sub-Saharan countries are doubly disadvantaged, being among the most vulnerable to climate change as well as having poor global mobility, with their passports ranking consistently low on the Henley Passport Index.
She highlights in the report that African HNWIs place a particularly high value on family and leaving a lasting legacy for the benefit of future generations. “Most investment migration programs enable investors to include family members in their applications, and some allow qualifying siblings, parents and grandparents as well, making these programs an ideal mechanism for protecting loved ones by ensuring that they have optionality in terms of where they can live, work, study, and retire to in the years ahead.”
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.”