Surge in Africa’s wealthy

The number of Ultra High Net-Worth Individuals on the African continent is expected to increase by 53% over the next 10 years, having more than doubled over the past decade.

This is according to a new wealth report by consultancy firm, Knight Frank, highlighting and projecting the growth of the world’s wealthiest individuals between 2003 and 2023.

Ultra High Net-Worth Individuals (UHNWIs) are people who have a net worth above US$30 million (R322.5 million), and the total number of these individuals has increased by almost 60% over the last decade.

In 2003, Knight Frank recorded 105,641 individuals who qualified for the title – a figure which has increased to 167,669 in 2013. By 2023, this number is projected to grow by a further 28%, to 215,113 UHWNIs.

As of 2013, Europe is home to the highest amount of UHNWIs, with 60,503 individuals, a figure which is expected to increase by 21% by 2023 to 73,396.

North America, with 43,626 UHWNIs is home to the second biggest batch of wealthy people, with Asia’s 41,114 UHNWIs populating third place.

Africa, while currently the bottom of the pile for high net worth individuals, is expected to see the most growth over the next decade for wealth creation, albeit off a low base.

The continent is expected to see a growth of 53% in UHNWIs to 2,858 individuals by 2023 from 1,868 in 2013.

Ultra High Net Worth Individuals, Growth 2003 – 2023

A look at Africa

Of the 90 countries ranked in the report, South Africa is listed at 36th in terms of the number of wealthy individuals – and 44th in terms of expected growth in said individuals over the next 10 years.

According to Knight Frank’s data, Johannesburg is Africa’s leading city in terms of HNWIs, with the current tally of 285 HWNI’s expected to grow by 41% to 403 by 2023.

That ranks Joburg as the 37th fastest growing millionaire city in the world.

Following in 42nd place, overall, Africa’s second largest growing HWNI city is Cape Town, which is expected to see its number of wealthy individuals grow 37% from 110 HWNIs to 151 over the next 10 years.

This is ahead of three other African cities, namely, Cairo (Egypt), Lagos (Nigeria) and Nairobi (Kenya).

Nairobi, however, is ranked higher in terms of growth (17th), with its 65 UHWNI’s expected to grow 78% to 116 in the next decade.

The IMF predicts that the economy of sub-Saharan Africa will grow by 5.7% per annum between now and 2018, up from 4.7% per annum in the preceding five years. Key among the continent’s emerging hubs is the Kenyan capital, Nairobi, the firm noted.

According to Knight Frank, Africa is viewed as a destination that is attractive to foreign investors: mobile phones are ubiquitous, urban growth is swelling the ranks of the middle classes.

“This is the most important African business centre between the Mediterranean and Johannesburg,” said Anthony Havelock, Knight Frank’s Head of Agency in the city.

“International companies recognise that there’s too much going on in Africa to run their entire operations out of South Africa. Google, JPMorgan Chase, Colgate-Palmolive: they’re all here.”

Knight Frank noted an increase in demand – again, off a low base – for luxury goods from African countries like Nigeria, Ghana, South Africa and Angloa.

“Although Africa’s luxury industry is still only embryonic, with most major brands restricting themselves to South Africa for now, the sector is keeping a close eye on the continent’s increasing number of UHNWIs,” the report said.

More on African wealth

Is South Africa a failed country?

South Africa’s richest people in 2014

South Africa in 2030

South Africa to lose African crown