South Africa continues to lose thousands of millionaires

Credit Suisse has published its annual wealth report for 2021, showing how the Covid-19 pandemic has impacted wealth around the world.

The group estimates that 4.4% of total global household wealth was lost between January and March 2020 and global wealth per adult declined by 4.7%.

“However, reassured by the prompt action of governments and central banks, financial markets regained confidence and the losses in equity markets were largely reversed by the end of June.

“That much was understandable. But what happened in the second half of 2020 was unforeseen,” it said.

  • Share prices continued on an upward path, reaching record levels by the end of the year.
  • House prices rose at rates not seen for many years. This has led to major gains in household wealth throughout the world. The net result was that $7.4 trillion was added to global household wealth during the year. At the end of 2020, it totalled $418.3 trillion, up 7.4%.
  • Wealth per adult rose 6% to a new record high of $79,952 (R1.13 million).
  • Depreciation of the US dollar flatters these gains: adjusting for exchange rate changes, total wealth would have risen by 4.1% and wealth per adult by 2.7%.

South Africa

While this is positive news at the global level, the report shows that wealth in South Africa was not as fortunate in avoiding the impact of the pandemic.

Credit Suisse estimates that there are 58,142 dollar millionaires in South Africa.

While this is above estimates made by other groups such as New World Wealth, it is approximately 3,000 fewer millionaires than reported by Credit Suisse in the previous year (2019: 61,000).

Wealth per adult amounted to $20,308 (R289,300) in South Africa at the end of 2020, and the country remains the outlier on the continent as the average for Africa as a whole is $7,371 (R105,004).

The current composition of assets in South Africa is similar to 2000. Financial assets were 68.1% of total assets in 2000 and 64.4% in 2020. But the share of financial assets fell prior to the global financial crisis, registering 59.8% in 2008, and then rebounded, reflecting the rise in share prices.

Over the course of 2020, net worth per adult decreased by 5.7% in South Africa, mostly attributable to exchange-rate depreciation of 4.7%.

Financial assets fell from 65.5% of all assets to 64.4%, while debt also dropped from 16.9% to 16.2% of gross assets.


Read: How a new wealth tax could work in South Africa

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South Africa continues to lose thousands of millionaires