Rich South Africans looking to emigrate often don’t follow through: expert

While emigration consultants have noted a sharp increase in the number of South Africans interested in leaving the country, many don’t follow through.

Speaking on CNBC Africa’s Power Lunch, Juerg Steffen, CEO of emigration consultancy firm Henley & Partners, said that the company has noted a sharp increase in the number of South Africans applying to leave the country by using the group’s services – up 30% year-on-year.

However, he noted that this is not necessarily an indication of entire families wanting to jump ship.

In fact, according to Steffen, these applications are more a reflection of entrepreneurs and other skilled locals who are looking to keep living in South Africa, but are also seeking opportunities or a ‘plan B’ abroad – and many don’t follow through.

The trend he has noticed is that rich South Africans seek second passports primarily as a means to travel the world a lot easier, as dual citizenship, particularly in Europe, removes many barriers.

“Education is also another big reason – it’s always helpful to have another citizenship, people like having a plan B, ” Steffen said.  “They don’t really want to leave. They either want a residential investment as a plan B, or they want a better travel document so they can travel more or study around the world.”

Steffen said that when people feel uncertain or at risk, the number of applications for residency programmes shoot up, and the process is also fed by friends and family who do it and spread the word – causing a ripple effect.

However, he said that many start the process – usually at the end of the year – and realise by the middle of the next year that they’re not quite there yet.

“At the start of the process application numbers are very high, but as time goes on, the numbers drop very fast,” he said.

Notably, while many profile the South Africans looking to leave as primarily skilled white males, Steffen said that the majority of applications going through his business are from black South Africans.

This supports the government’s own findings that the number of skilled South Africans leaving the country outweighs the number of white South Africans.

He said that the profile of the applicants varies based on which programmes they want to use. Programmes that help get European citizenship are currently the most sought-after, with prices ranging from 1 million to 4 million euros.

However, citizenship programmes in the Caribbean, for instance, can start at 100,000 euros, and are more accessible.

Wealthy South Africans

Research shows that there are almost 2,000 more dollar millionaires in South Africa than a year ago – suggesting that the narrative of rich South Africans fleeing the country may also be overstated.

According to the latest data on high net-worth individuals (HNWIs) in the Knight Frank report, at the end of 2018, there were approximately 52,926 HNWIs in South Africa, each with net assets of $1 million or more.

At the end of December 2017, there were 51,110 HNWIs recorded, pointing to an increase of 1,800 dollar millionaires over the period.

Further, the group expects the number of HWNIs in the country to grow by 16% to 61,474 millionaires over the next five years – running counter to the idea that wealth is leaving the country en masse.

Emigration of wealth

NWW’s Wealth Migration Report, published in April 2019, noted that South Africa recorded a substantial outflow of wealth since 2009, with the group estimating that around 3,000 HNWIs have left the country over the past decade – averaging 300 a year.

Added to this, property data shows a sharp rising in the number of home-owners selling to emigrate – while government data also shows that a large number of skilled South Africans are leaving for better opportunities abroad.

While it is undeniable that wealthy individuals are moving around, the projected growth figures point wealth generation still happening both within and without South Africa’s borders.

Read: The one thing the world’s richest people are piling into right now

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Rich South Africans looking to emigrate often don’t follow through: expert