Weak rand bites the rich as South Africans flee the country

A new report shows that wealthy South Africans are leaving the country while they still have the money, as a weak local currency has taken a toll on their fortunes.

The South Africa 2016 Wealth Report, set to be released this week, shows that the end of 2015, there were approximately 38,500 HNWIs living in South Africa, with a combined wealth of US$159 billion.

HNWIs are defined as people who have a net worth of US$1 million or more, according to metrics used by research firm, New World Wealth – the authors of the report.

South Africa is the largest HNWI market in Africa; however, according to NWW, South African volumes of wealthy individuals decreased by 10% during the review period (2007 – 2015).

“Growth was negatively influenced by a significant depreciation of the rand against the US dollar, falling equity markets and the migration of a significant number of HNWIs out of the country,” the report said.

2015, NWW said, was a particularly poor year for SA millionaires – HNWI volumes declined by 18% during the year. The research firm report 46,800 wealthy people in 2014.

Between 2000 and 2014, approximately 8,000 HNWIs abandoned the country, New World Wealth said in a report last year.

“Along with the rise in second citizenship applications, the number of people changing domicile (or immigrating) has increased dramatically since the turn of the century,” NWW said.

“Major reasons for this include: turmoil in home country, security concerns and optimizing education of children.”

South African HNWIs tended to move to Australia, the UK, Cyprus, Mauritius, the USA and Canada, NWW said.

Over the two year forecast period, the number of South African HNWIs is forecast to grow by 10%, to reach approximately 42,300 by 2017.

“Growth is constrained by the current electricity crisis and a rising level of government regulation in the business sector,” it said.

More on South Africa

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How many whites have left South Africa in the last 5 years

Where South Africa’s richest people are moving to

 

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