South Africa’s super-rich are sinking

 ·28 Feb 2024

The latest Knight Frank Wealth Report 2024 shows that South Africa has lost 11 ultra-high-net-worth individuals in the last year – while thousands more millionaires have been lost over the last decade.

The 2024 instalment of the report is based on responses provided during December 2023 by more than 600 private bankers, wealth advisors, intermediaries and family offices who, between them, manage over $3 trillion (R57 trillion) of wealth for Ultra-high-net-worth individual (UHNWI) clients.

An ultra-high-net-worth individual is defined by Knight Frank as someone with a net worth of $30 million (approx. R570 million) or more.

According to the report, the number of UHNWIs globally rose 4.2% to 626,619 from 601,300 a year earlier, more than reversing the declines seen in 2022.

At a regional level, wealth creation was led by North America (+7.2%) and the Middle East (+6.2%), with Latin America being the only region to see its population of wealthy individuals decline.

Compared to 2022, Africa realised a 3.8% rise in the number of super-rich people, recording 2,996 UHNWIs in 2023 in contrast to the 2,886 noted in the previous year.

South Africa’s super-rich

Despite the global increase in the number of super-wealthy people, South Africa is one of only two countries that recorded a decline in UHNWIs out of 30 nations tracked by Knight Frank.

South Africa recorded 835 UHNWIs in 2023 compared to 846 in 2022, representing a decline of 1.3%.

Although Taiwan was the second country to see a drop in its super-rich population, South Africa saw the steepest decline as Taiwan recorded a smaller 0.3% drop in UHNWIs from 7,666 in 2022 to 7,640 in 2023.

This downward trend of wealthy individuals in South Africa was also recorded in the latest BRICS Wealth Report for 2023, which showed South Africa has lost thousands of millionaires over the last ten years – ranking near the bottom of the top BRICS+ countries assessed.

The report highlighted that South Africa was home to 37,400 US dollar millionaires (including 102 centi-millionaires and five billionaires) at the end of 2023 – a 20% decline from 2013.

Dollar millionaires are defined as individuals with investable assets of over $1 million (approx. R19 million), while centi-millionaires or ‘centis’ are individuals with more than $100 million (approx. R1.9 billion) in investable assets.

This means South Africa has lost approximately 9,350 US-dollar millionaires over the past ten years.

Positive outlook

Despite the loss of wealth in South Africa after the past year and beyond, the picture improves when looking to the decade ahead.

In terms of private wealth growth projections, South Africa is expected to see a 60% increase in wealth per capita by 2033.

This optimism extends to UHNWIs in South Africa, with the Knight Frank Wealth Report 2024 noting an increase in South Africa’s super-wealthy population, which is expected to grow by 19.5% by 2028.

The reports don’t outline why or how South Africa is losing its super-wealthy; this could be explained either through emigration or through local wealth destruction via a poor-performing economy and weaker rand vs dollar valuations (i.e., someone may still be considered super wealthy in rand terms, but not in the dollar terms, as tracked by the report).

The latest New World Wealth report points towards emigration as one of the more significant factors, however.

According to the report, while the exit of HNWIs is driven by various factors – social, political and economic – the rich typically try to move to a “safe haven country”.

A “safe haven country” is a country with good safety and security that is shielded from the world’s economic and political problems.

In South Africa, over the course of 2023, key concerns over personal security and safety, including rising rates of crime and violence, as well as worries about education and healthcare, peaked – which are foundational considerations for high net-worth families.

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