South Africa has long been regarded as a powerhouse in terms of creating wealth for the African continent. With the highest number of Black US Dollar millionaires in Africa and no 3 position behind USA and Brazil globally – a commendable 17,300 individuals – the country has been hailed as a success story in terms of fostering entrepreneurship and supporting small businesses. Unfortunately, the latest African Wealth Report for 2023 indicates that South Africa has seen a 21% decline in the number of millionaires over the last decade due to emigration and the destruction of wealth.
The report by Henley & Partners and New World Wealth, reveals that South Africa was home to 37,800 US Dollar millionaires at the end of 2022, representing over a quarter of the 138,000 millionaires on the continent. Egypt came second at 16,100 millionaires, followed by Nigeria (9,800), Kenya (7,700) and Morocco with 5,800 millionaires.
Moreover, South Africa has the highest number of centi-millionaires in Africa, with 98 individuals fitting in this category. Wealthy individuals of this calibre are typically the catalysts for founding large, multinational companies. Therefore, their presence in a country is invaluable for job creation and generating a healthy business environment.
Despite this, the report indicates that wealth on the continent appears to be declining, primarily because South Africa’s performance has been poor. The authors attribute this to economic metrics declining significantly over the ten-year period in dollar terms.
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Looking back to 2012, South Africa had an impressive 48,800 millionaires, highlighting a loss of 11,000 millionaires in the last ten years. While South Africa’s current level of centi-millionaires is impressive compared to other African nations, this figure has also declined over the last few years, indicating a loss of 60 such individuals over the years.
This decline does not bode well for South Africa. High-net-worth individuals are often involved in philanthropy, contributing to the socio-economic development of the country. If South Africa cannot retain its millionaires, it will undoubtedly lead to a decline in employment and the overall economic development of the nation.
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.
Moreover, a sizeable number of billionaires have left Africa, with only 23 out of 52 African-born billionaires still residing in their home continent. Many of these individuals are entrepreneurs and company founders who have the ability to create significant employment in their host countries, further indicating the impact of declining wealth on the African continent.
Undoubtedly, this decline in millionaires is a cause for concern in terms of the impact on job creation and socio-economic development in South Africa. Moreover, the exodus of wealthy individuals to other countries could indicate disillusionment with the country’s political and economic systems and consequent uncertainty about investment opportunities. South Africa must prioritize addressing this decline in wealth to ensure its continued economic success and development.
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