Africa is now home to more than 160,000 people with personal fortunes worth in excess of $1m (£642,000), a twofold increase in the number of wealthy individuals since the turn of the century that highlights the problem of deepening inequality as some of the world’s poorest nations register strong economic growth.
The combined wealth holdings of high-net-worth individuals – those with net assets of $1m or more – in Africa totalled $660bn at the end of 2014, according to a report by New World Wealth, a South African market research firm.
Meanwhile, the number of poor people in Africa – defined as those living on less than $1.25 a day – increased from 411.3 million in 2010 to 415.8 millon in 2011, World Bank data shows.
By 2024, the number of African millionaires is expected to rise 45%, to approximately 234,000, according to the report.
During the past 14 years, the number of high-net-worth individuals in Africa has grown by 145%. The rate for the Middle East over the same period was 136%, while in Latin America it was 278%. The global average was 73%.
The report said that by the end of 2014, the number of people worldwide worth more than $1m had reached 13 million with a combined worth of $66tn, although the number of millionaires can vary depending on what assets are included and different methods have produced different figures. New World Wealth, for example, do not include primary residences when assessing wealth or net assets.
The World Bank has forecast an average of 5.5% economic growth for sub-Saharan Africa over the next year, though it warned that “extreme poverty remains high across the region”.
Nick Dearden, director of the advocacy group Global Justice Now, said the report shows deepening inequality across the continent.
“It’s no wonder that rich individuals in Africa are getting richer, because we’re seeing a form of ‘development’ … which hugely benefits the wealthy but makes the lives of the poor even harder. Aid money, trade agreements and corporate ‘investment’ pushed by Britain are locking countries into a form of growth which is all about making the rich even more rich and the poor even more poor.”
Mauritius has the wealthiest individuals in Africa, with average per-capita wealth of $21,470, according to the report. The rankings show that people in the Democratic Republic of the Congo are the poorest, at $230 a person.
To put Africa’s wealth into context: the global average wealth per capita is $27,600, with top-ranking countries such as Switzerland and Australia boasting per-capita wealth of more than $200,000.
“Over the last year there’s been very strong growth in places like Mozambique, Zambia and Tanzania. Going forward, we expect Mozambique to continue to be the fastest growing market for high-net-worth individuals in percentage growth terms. So I’d say that Mozambique stands out in this report,” said Andrew Amoils, head of research at New World Wealth.
Angola, where per-capita wealth rose from $620 a person in 2000 to $3,920 in 2014, recorded the highest growth over the 14-year period analysed.
In Zimbabwe, the worst performing country, wealth per capita dropped from $630 a person in 2000 to $550 a person in 2014. Zimbabweans have until September to turn in their Zimbabwean dollars before the currency is discarded.
The southern African country was one of the wealthiest countries in sub-Saharan Africa on a wealth-per-capita basis, said the report’s authors, but the country is now bottom of the rankings. They also note that while other low-ranked countries on the list such as Libya and Tunisia have been affected by uprisings and political instability, Zimbabwe remains under the same leadership.
The study identifies erosion of ownership rights in Zimbabwe, ongoing political intimidation, election fixing and investor confusion arising from the banning of the independent media in the early 2000s as key reasons for the country’s poor performance.
South Africa is home to the highest number of millionaires on the continent at 46,800 in 2014. Egypt comes in second with more than 20,000, followed by Nigeria in third place.
Amoils said African economies benefit from rich citizens: “A lot of [high-net-worth individuals] keep their wealth locally, so normally, for most African countries, it’s between 50% and 70% local wealth. There’s lots of advantages because a lot of [these individuals] are business owners and a lot of them start businesses even if they are in corporate environments.”
Dearden said: “From Nigeria to Mozambique you can see poverty rising at the same time as rapid growth. What does this mean? The growth is being gobbled up by the super-rich and transnational capital. And that means ordinary people, by comparison, find their lives even more impoverished.
“It could be different: with decent government spending on public services, progressive taxation, regulation to control capital and regional trading relationships to wean countries off dependency on western markets.”