Africa’s millionaire factory

South Africa is creating relatively more millionaires than anywhere else in the world. Although the total number of high-net-worth individuals in South Africa is only a fraction of the numbers in the other BRICS, the rate of increase in the number of millionaires in South Africa is the highest in the world. Interestingly, since 2007, the number of black millionaires has almost doubled and growth is around 80%. Tom Nevin has the details.

South Africa is the world’s leader when it comes to making millionaires, relatively speaking. The continent’s southern tip recently flaunted its latest clutch of the fabulously rich in the pages of New World Wealth (NWW), which reveal the globe’s wealthiest millionaires, billionaires and multiples thereof. The latest NWW research shows that South Africa is home to 49,000 dollar millionaires, 300 more than in 2013.

Although not matching the expansion of HNWI in South Africa,  there has been an expansion of millionaires in the rest of Africa with Kenya ranking third after South Africa and Egypt

Africa as a whole is home to around 100,000 greenback millionaires and wealthier, an increase of 7.4% over last year. NWW also expects the number of Nigerian millionaires to climb by 47% in the next four years.

While figures dating back 10 years show that white millionaires  in South Africa easily outnumbered their black counterparts back then, the gap is closing and should see parity in about 15 years from now. According to the mass circulation Sunday tabloid, City Press, the number of South Africa’s millionaires has grown by 106% over the past decade and multimillionaires by 102%.

This easily beats global performance. Over the past 10 years, the number of multimillionaires worldwide increased by 71%, while millionaire numbers rose by 58% in the same period.

This puts South Africa at 0.4% of the total number of millionaires globally, around 13m, reports NWW, adding that 2,060 South Africans are multimillionaires. That, however, is just for starters. The total number of millionaires in the country will probably top 86,700 by 2030.

What is a millionaire?
Millionaires are classified as high-net-worth individuals (HNWIs). They have at least $1m or more in net assets while multimillionaires have assets of at least $10m.

These are the ultra-high-net-worth individuals, or UHNWIs, a supergroup that enjoy net assets of $30m or more. There are 581 such individuals in South Africa with an average of $12.47m or, translated in rand local currency terms, some R1.3bn made up of cash, shares in public and private companies, residential and ‘passion’ investments such as art, planes and real estate. While this is impressive, it tends towards the insignificant in the BRICS wealth landscape with South Africa demonstrating the lowest number of UHNWIs.

China is tops with 7,900 UHNWIs, followed by Brazil (4,100), India (2,500) and Russia (1,280). But that state of affairs could change quite dramatically in the next four to five years when NWW foresees the number of millionaires in South Africa increasing impressively, “as new businesses are developed in the country”.