Africa, the breeding ground of some of the world’s richest people has, over the past few years, seen a sharp decline in its ‘super-rich’ populations.
The 2024 Africa Wealth Report published by international wealth advisory firm Henley & Partners reveals that almost 20,000 ultra-rich individuals have moved away from the continent in favour of foreign destinations.
According to the Wealth Report, there are currently 135,200 high-net-worth individuals (HNWIs) with a liquid investable wealth of $1 million or more living in Africa, along with 342 centi-millionaires worth $100 million or more, and 21-dollar billionaires.
However, the continent has lost approximately 18,700 HNWIs from 2013 to 2023.
“Africa’s ‘Big 5’ wealth markets — South Africa, Egypt, Nigeria, Kenya, and Morocco — together account for 56% of the continent’s millionaires and over 90% of its billionaires,” the wealth report read.
Why are billionaires leaving Africa?
Dominic Volek, Group Head of Private Clients at Henley & Partners, attributes this exodus to several factors, including currency depreciation and underperforming stock markets.
“Currency depreciation and underperforming stock markets have chipped away at Africa’s wealth compared to global benchmarks. The South African rand fell 43% against the US dollar from 2013–2023, and even though the JSE All Share Index, which makes up well over half of Africa’s listed company holdings, rose in local currency terms, it was down 5% in US dollar terms over that period. 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,” Dominik explains.
In addition to financial factors, regulatory challenges, lack of adequate infrastructure, security concerns, and taxation policies are driving the ultra-rich to seek better opportunities abroad.
Head of Research at New World Wealth, Andrew Amoils, adds that African nations 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). 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. Most of these individuals have relocated to the UK, the USA, Australia, and the UAE. Significant numbers have also moved to France, Switzerland, Monaco, Portugal, Canada, New Zealand, and Israel.”
“If a well-paid executive making a million dollars a year leaves a country, the person can be replaced. But if it’s a billionaire who runs a big company and then the person leaves, moving that business somewhere else, we are talking about a much bigger impact,” Amoils adds.
Chidinma Okebalama, one of the experts involved in the research concurred with Amoils sentiments stating, “When they leave, billionaires create a colossal job and wealth creation void. “Wherever they go, the opportunities go with them.”
In certain instances, however, the movement has been intra-Africa. For example, approximately 1,600 millionaires moved between African countries over the past decade, with most relocating to Mauritius and South Africa, and some moving to Morocco and Namibia.
Impact on African economies
The departure of high-net-worth individuals is having a considerable impact on local economies. Their investments and spending are vital to economic growth, and their absence is felt keenly.
The outflow of wealth hampers the continent’s economic development. The investments that these individuals could have made in local businesses, infrastructure, and other sectors are now benefiting other regions.
This wealth drain also affects job creation and innovation, as the entrepreneurial activities of HNWIs often lead to new business ventures and economic opportunities.
Notably, despite the outflow, Africa still boasts some of the world’s wealthiest cities such as Cape Town, Johannesburg, Nairobi and Lagos.
Commenting in the 2024 Africa Wealth Report, renowned South African political commentator, and newspaper columnist, Justice Malala, said that Africa is poised to be the second-fastest–growing region in the world in 2024, after Asia.
“The African Development Bank predicts that Africa will account for 11 out of the 20 fastest-growing economies in the world this year. And with a new global political order emerging, African voices are also being elevated in international decision-making bodies. With Russia, China, the USA, and the EU all jostling for favour on the continent, African leaders have become more emboldened and are demanding a seat at the top tables. These will come with closer relationships between continental leaders and other “middle powers” such as India, Turkey, Argentina, and Saudi Arabia.”
