South Africa is losing thousands of millionaires

 ·5 Jan 2021

The latest research from New World Wealth and AfrAsia Bank shows that South Africa has lost 3,400 dollar millionaires over the last year, with the country now home to only 35,000 high net worth individuals (HNWIs).

HNWIs are defined as dollar millionaires or people with a net worth of $1 million (R14.6 million) or more.

In December 2019, New World Wealth reported that there were approximately 38,400 dollar millionaires living in the country – down by 800 from the number recorded for 2018, when there were 39,200 millionaires recorded.

The 2018 figure was down significantly – a loss of 4,400 millionaires – from the year before that (2017), showing a continued trend of money leaving South Africa, either through emigration, or destruction of wealth through the weak economy.

Overall, between 2017 and 2020 South Africa lost 8,600 millionaires.

Year Millionaires Change
2017 43 600
2018 39 200 -4 400
2019 38 400 -800
2020 35 000 -3 400
Total -8 600

There has also been a decline in the number of multi- and centi-millionaires.

While South Africa is losing wealthy individuals at an alarming rate, New World Wealth notes that the country is still home to over twice as many millionaires as any other African country.

It also ranks 30th in the world by this measure, ahead of major economies such as Greece, Portugal and Turkey.

Wealthy individuals in the country are broken down as:

  • Approximately 680,000 mass affluent individuals living in South Africa, each with net assets of US$100,000 or more.
  • Approximately 35,000 millionaires (HNWIs) living in South Africa, each with net assets of US$1 million or more.
  • Approximately 1,800 multi-millionaires living in South Africa, each with net assets of US$10 million or more (down from 2,030 previously).
  • 86 centi-millionaires living in South Africa, each with net assets of US$100 million or more (down from 92 previously).
  • 5 billionaires living in South Africa, each with net assets of US$1 billion or more.

Most HNWIs are based in Johannesburg (Sandton especially), Cape Town, Umhlanga and Pretoria, the group said.

Push and Pull

In a 2020 wealth migration report, New World Wealth identified South Africa as one of the countries with large millionaire outflows during the course of the year.

While South Africa doesn’t crack the lists for countries with the most millionaire inflows or outflows in 2020, the report noted that it is among a number of countries that have seen a ‘significant’ number of millionaires leave the country in the last year.

The group said that over 100 millionaires from South Africa moved to a different country. Among inflow destinations, Portugal was highlighted as one country that proved particularly popular for South African millionaires looking to relocate.

“Portugal continues to attract a steady number of HNWIs, fuelled by its popular investor visa program which has attracted large numbers of HNWIs from China, Brazil, South Africa, Turkey and Russia over the past few years,” it said.

Common reasons why HNWIs move away:

  • Safety – woman and child safety especially;
  • Lifestyle: climate, pollution, space, nature and scenery;
  • Financial concerns;
  • Schooling and education opportunities for their children;
  • Work and business opportunities;
  • Taxes;
  • Healthcare system;
  • Standard of living;
  • Oppressive government.

However, despite being a net loser of wealth, New World Wealth identified a number of characteristics that make South Africa an appealing destination for wealthy individuals.

These include:

  • Lifestyle aspects: weather, beaches and scenery;
  • A large free media which helps disseminate reliable information to investors. This sets South Africa apart from most other emerging markets worldwide;
  • One of the 20 biggest stock exchanges in the world (by market cap);
  • A well-developed banking system and large fund management sector;
  • Hub for doing business in the rest of Africa;
  • Luxury food stores such as Woolworths, which appeal to wealthy consumers;
  • Exclusive areas such as Umhlanga Rocks and the Atlantic Seaboard in Cape Town;
  • Top-end estates and apartments;
  • Good transport infrastructure;
  • World-class shopping centres such as: Gateway, Sandton City and the V&A Waterfront.

Read: Why rich South Africans are less optimistic about their finances heading into 2021

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