Nigeria hosts $228bn private wealth, worst growth in Africa

• Mauritius, Rwanda lead Africa’s wealth market

Sopuruchi Onwuka

Despite ranking third for hosting significant $228 billion of Africa’s $2.1 trillion private wealth, Nigeria’s per capita private wealth of $1,100 places it towards the bottom of the overall income table in Africa.

 The bulk of the private wealth in Nigeria, according to Africa Wealth Report 2022, is concentrated in the hands of only 10538 dollar millionaires and four dollar billionaires in Africa’s biggest economy with about 200 million people in population.

Apart from strong income concentration, the Nigerian per capita private wealth figures published in the report also sharply indicated wide gap between the few super-rich and a vast population of impoverished people struggling in an insecure society and uncongenial business environment.

The Africa Wealth Report is published by Henley & Partners, the global leader in residence and citizenship by investment, in partnership with South African wealth intelligence firm New World Wealth. The report provides a comprehensive review of the wealth sector in Africa, including trends among high-net-worth individuals (HNWIs), the luxury market, and the wealth management sector on the continent.

The report shows that Rwanda, which has overcome its civil war setbacks, and Mauritius now form part of the world’s fastest growing markets hosted in the continent. It added that despite nominal label of Africa’s biggest economy, the country is actually rolling downhill with the worst value depreciation in the continent.

Henley and Partners produced a table which showed the actual distribution of wealth across the citizens of selected economies of the continent as the prime indices of wellbeing and misery. In the per capita private wealth table, Nigeria slid from third to 11th position in a list of 17 countries, graphically indicating income concentration in the economy.

According to the country per capita wealth rankings, Mauritius topped the list with $34,500 per citizen, followed by South Africa which posted $10,970. Namibia’s per capital wealth came next at $9,320; then Botswana with $7,880; and Morocco with $3,380.

The report posted per capita private wealth in Egypt at $3,000; Ghana has $1,890; Kenya follows with $1,700; then Angola with $1,620; and Côte d’Ivoire with $1,610.

 Nigeria falls into the list of countries with poor people with per capita private wealth of $1,100; Tanzania has $940; Rwanda comes with $850; Uganda boasts of $820; Zambia shows $760; Mozambique has $650; and Ethiopia posts $540.

“There are also several well-established wealth hubs on the continent, including South Africa, Egypt and Morocco, that already host large numbers of HNWIs. HNWIs in Africa are extremely mobile and their movements provide a valuable insight into future economic trends in each country. For instance, countries such as Mauritius that attract HNWIs through migration have a significant economic advantage over the rest,” the report stated.

On the other hand, the report holds, Nigeria forms part of four countries pulled down Africa’s private wealth in the past 10 years.

“The total wealth held in Africa has fallen by 7 percent over the past decade (2011 to 2021). Performance was constrained by poor returns in the three largest African markets, namely South Africa, Egypt and Nigeria. Angola also performed poorly,” the report declared.

“Mauritius was the fastest growing market in Africa during the review period (in percentage growth terms), followed by Rwanda.

“Ethiopia came in at 3rd place. It should be noted that wealth in Ethiopia grew rapidly until 2019, but has struggled over the past two years (2020 and 2021),” parts of the report read.

In providing intelligence on business and social environment to high networth individuals for possible movement of wealth, Henley and Partners recommended Mauritius for its congenial fiscal and operating conditions.  

“Possible reasons for Mauritius’ high wealth per capita include Ease of doing business in the country. Mauritius ranks 1st in Africa and 13th worldwide in the World Bank’s 2020 Doing Business Report. Low taxes encourage business creation and appeal to retirees. Notably, there is no inheritance tax or capital gains tax in Mauritius. Mauritius was recently rated by New World Wealth as the safest country in Africa, along with Namibia and Botswana. Notably, safety is one of the key drivers of wealth growth in any country.

“A large number of wealthy individuals has relocated to Mauritius over the past decade. In addition, many locally born HNWIs have been created as the economy has grown. Mauritius is now home to around 4,800 HNWIs, compared to 2,700 HNWIs a decade ago,” the company stated.

It added that Mauritius also has a fast-growing local financial services sector and stock market (SEMDEX), and high per capita income levels.

“In July 2020, the World Bank officially classified Mauritius as a high-income country,” the report added.

Henley and Partners also published the 10-year wealth growth rate in the selected economies of the continent, with Mauritius leading with 74 percent growth in private wealth. Rwanda and Ethiopia followed with 60 percent and 52 percent respectively while Uganda followed with 50 percent.

Still on the growth side, private wealth in Kenya appreciated by 43 percent, it rose by 36 percent in Ghana and 34 percent in Tanzania.

Private wealth grew by 25 percent in Cote D’Ivoire, 20 percent in Mozambique and 18 percent in Morocco.

Private wealth suffered negative growth of -5 percent Namibia in the past 10 years. It also continued in the negative trend in Zambia which suffered -6 percent, in Botswana which suffered -7 percent and in South Africa which suffered -12 percent.

Worse performances are in Egypt which suffered -23 percent growth in private wealth within the period, in Angola which suffered -24 percent, and in Nigeria where 10 year private wealth growth rate was -27 percent.

Henley and Partners projected ‘very healthy’ overall 38 percent growth forecast for Africa by 203, to be driven by especially strong growth in the technology and professional services sectors.

The company stated that total private wealth held in Africa over the next 10 years is expected to reach US$3 trillion by 2031, with strong growth forecast in Kenya, Morocco, Mozambique and Zambia where growth rates are expected to be 50 percent and more.

“The other countries on our list should all see positive wealth growth of between 20 percent and 40 percent over the forecast period,” the company stated, adding that Mauritius, Rwanda and Uganda would be the strongest performing wealth markets in Africa during this period with growth rates of 60percent and above.

“Our growth projections for Mauritius are strong – we expect the country to experience wealth growth of 80 percent over the next decade (to 2031). This will make it one of the fastest growing high-income markets in the world over this period (in percentage  growth terms), together with Australia, New Zealand, Switzerland and Malta. By 2031, HNWI numbers in Mauritius are expected to reach over 8,000,” Henley and Partners stated.