AfrAsia Bank Africa Wealth Report 2021 has just been released, and this year’s report (the 4th) reveals that the total private wealth held in Africa is predicted to increase by almost 1/3rd, reaching US$2.6 trillion by 2030.
The pandemic has caused financial havoc over the past twelve or so months, and no continent has been immune to its impact. The African continent is vast, housing an incredible 54 countries if you include the island nations. There are currently around 1.2 billion people living on the African continent and among them is a large number of high net worth individuals (HNWI).
One of the first things you’ll notice when browsing the AfrAsia Bank Africa Wealth Report 2021 is the fall in the number of HNWIs. In 2010, the African continent boasted approx 150,000 HNWIs ($1m+), fast forward to 2020, and that number is now 125,000. During the same period, the total wealth has fallen from 2.4 (US$ trillion) to 2.0.
The AfrAsia Bank Africa Wealth Report 2021 also shows that Mauritius is considered the most accessible country when it comes to doing business and is the safest country; this is one of the significant drivers of wealth growth in a country. This has enabled Mauritius to increase its number of HNWIs, and surprisingly, this has not only been achieved from people moving to the country but also through local growth.
Some of the main reasons why Mauritius is performing well is down to a thriving and growing financial services sector, secure ownership rights that encourage property investment and low taxes, which is a big draw for retirees and new businesses.
Over the next ten years, Kenya, Ethiopia, Rwanda, and Mauritius will lead the charge in wealth creation. In addition to these countries, Mozambique, Zambia and Botswana are also expected to perform strongly.
“The AfrAsia Bank Africa Wealth Report 2021 is the benchmark of luxury sector research in the continent. Knowing where affluent individuals live, understanding their spending habits and being aware of their preferences is critically important to the providers of wealth management and luxury services in Africa and globally,” stated Andrew Amoils, Wealth Analyst at New World Wealth.
Key Findings within the AfrAsia Bank Africa Wealth Report 2021:
- Total private wealth held in Africa amounts to approximately USD 2.0 trillion as of Dec 2020.
- The “Big 5” wealth markets in Africa are South Africa, Egypt, Nigeria, Morocco and Kenya – together; these five countries account for over 50% of Africa’s total wealth.
- South Africa is home to over twice as many millionaires (HNWIs) as any other African country, whilst Egypt has the most billionaires on the continent.
- Mauritius remains the wealthiest country in Africa, with a wealth of capita exceeding USD 30,000 per person. The island was officially classified as a high-income country by the World Bank in July 2020.
- The COVID-19 pandemic had a severe impact on Africa, resulting in a decrease of about 9% in private wealth and HNWI levels in 2020. This drop was driven by salary cuts and job losses in the travel, hospitality, manufacturing and real estate sectors, closure of local businesses, weakening of the residential property market and rising household debt.
- Total private wealth held in Africa is expected to rise by 30% and is set to reach USD 2.6 trillion by 2030. This growth will be driven by strong growth in the billionaire and centi-millionaire’s segments in fast-growing economies such as Ethiopia, Mauritius, Rwanda, Kenya and Uganda.
Commenting on the report, Marc-Alexandre Masnin, Head of Wealth Management International and Investment Sales at AfrAsia Bank, said, “Our partnership with this South African research house enables us a deep understanding of Africa’s wealth markets and its wealth owners. Despite its dot size, Mauritius continues to host some 4,400 millionaires, which indicates the confidence that wealth owners have in this jurisdiction.
Safety and higher-life standards are hailed as the key reasons why HNWIs choose Mauritius as their domicile besides its attractive tax regime. This is in the main due to no capital gain and no inheritance tax liability.
Africa should be the home of another 30,000 millionaires by 2025, and for Mauritius to continue to remain attractive and relevant in this constantly changing environment, both the regulators and government need to ensure that the image of Mauritius remains impaired both in safety and wealth deployment terms.”
How to access the AfrAsia Bank Africa Wealth Report 2021
The AfrAsia Bank Africa Wealth Report 2021 was produced in collaboration with New World Wealth, a leading wealth intelligence company based in South Africa. The report can be read and downloaded here.
Read wealth and finance-related articles in our dedicated section here.