South Africa’s rich might still be the flashiest on the continent but they have only grown their wealth by a small fraction compared with their counterparts across Africa, according to the latest AfrAsia Bank Africa Wealth Report released on Thursday.
The report shows that although South Africa has the most multimillionaires and centimillionaires, over the last decade it has not contributed much to the continent’s 14% overall wealth growth.
“Total wealth held in Africa has risen by 14% over the past 10 years (2008 to last year). Africa’s performance was constrained by poor performance in the three largest African markets – South Africa, Egypt and Nigeria. Mauritius was the top-performing market.
“Ethiopia also performed well, from a very low base, which makes growth easier. Average wealth in Ethiopia currently stands at about $650 (R9 473,75) per person. Botswana’s growth was impressive when considering that wealth per capita there is already quite healthy at about $7 900 per person,” reads the report.
It shows South Africa is still the heavyweight economy in Africa but has only grown its own wealth by a mere 13% at 14th place – behind countries such as Mozambique with 15%, Angola at 25%, Botswana with 46% and Rwanda with 68%.
Topping the list is Mauritius with a wealth growth of 124%. The only country South Africa surpassed is Nigeria, which grew by only 5%.
The report indicates that Mauritius, as the world’s second fastest-growing wealth market in the last decade after China, topped the list because of intervention in its safety, thriving financial services sector, secure ownership rights, low level of government regulation in business and low taxes (15% for both income and corporate tax), as well as being able to attracted high net worth retirees.
The report also highlights that wealth per capita is a better measure of financial health than GDP per capita and by the former measure, Mauritians are the wealthiest.
“Africa is the hinterland for Mauritius. The report findings confirm that over the next decade, multiple African economies will show positive growth.
“Mauritius is well positioned to be the preferred international financial centre which can receive capital, and channel it into investments wherever is needed.
“By being a recipient of wealth and having a deep understanding of the African continent, Mauritius can be an advisor for rooting that wealth into various corners of Africa depending upon how the wealth owners perceive that particular risk,” said Sanjiv Bhasin, CEO of AfrAsia Bank.
South Africa still tops with a wealth market worth $649 billion.
Among the things that attract the wealthy to South Africa are lifestyle aspects such as climate, wildlife, beaches, good private schools, top class shopping centres, restaurants and hotels. It also has the largest luxury goods market by revenue.