You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

South Africa’s private wealth plunges

Africa Wealth Report 2021 estimates around 4 200 millionaires left SA over the past decade, but the depreciating rand and Covid-19 fall-out are also to blame.
Johannesburg and the financial hub of Sandton is home to most of South Africa's dollar millionaires, but the country has seen a decline in high-net-worth individuals over the past decade. Image: Shutterstock

Despite South Africa being home to more than twice as many dollar millionaires or high-net-worth individuals (HNWIs) than any other African country, the total private wealth held in the country declined by 25% between 2010 and 2020.

This is according to the Africa Wealth Report 2021, published on Tuesday by Johannesburg-based wealth intelligence firm New World Wealth together with Mauritius-based AfrAsia Bank.

The report notes that South Africa has around 36 000 millionaires or HNWI, 1 930 multi-millionaires (+$10 million) and five dollar-billionaires.

But alarmingly, it also points out that around 4 200 HNWIs have left South Africa over the past decade [2010 to 2020].

This, together with the depreciation of the rand, poorer economic growth levels as well as the impact of Covid-19 last year, contributed to the 25% plunge in privately held wealth.

Read: Emigration, delays, double tax and other worries

The annual Africa Wealth Report, compiled by noted wealth analyst Andrew Amoils, provides an in-depth review of the wealth sector, including HNWI trends, luxury trends and wealth management trends on the African continent.

According to the latest report, total private wealth held on the continent amounts to approximately $2.0 trillion, with South Africa accounting for just over $600 million of this figure.

‘Total wealth’ refers to the private wealth held by all the individuals living in each country. It includes all their assets (property, cash, equities, business interests) and less any liabilities. Only people living in each country (residents) are included in the research, while government funds are excluded.

Egypt is the second largest ‘wealth market’ in Africa, however it has one more billionaire (6) than South Africa.

South Africa has more than double the amount of HNWIs and multi-millionaires than Egypt, which comes in at 15 500 and 810 respectively.

Countries in Africa with the most high-net-worth individuals (HNWIs).  Source: New World Wealth

Nigeria, the continent’s biggest economy, is in third spot on the private wealth list. It has 9 100 HNWIs, 460 multi-millionaires and four billionaires.

Overall private wealth in Africa declined 16% in US dollar terms over the past decade, with the Covid-19 financial fallout dealing a significant blow last year.

According to the Africa Wealth Report 2021, the continent had around 150 000 HNWIs back in 2010, but this has dropped to around 125 000 in 2020.

South Africa’s decline was worse, largely due to the depreciation of the rand, poorer economic growth levels, Covid-19 and emigration from the country.

Africa’s Wealthiest Cities. Source: New World Wealth

“Africa’s performance was constrained by poor performance in the three largest African markets, namely: South Africa, Egypt and Nigeria. Angola also performed poorly,” Amoils notes in the latest report.

Read: Guess where SA’s fastest growing wealth market is?

“The coronavirus outbreak has also had a severe impact on Africa – our estimates show that private wealth and HNWI levels in Africa have dropped by around 9% over the past year [2020] alone,” he adds.

“SA’s performance has been poor, with total private wealth held in the country declining by 25% over the past decade, when measured in US dollar terms,” he reiterates.

Explaining the contributors to the country’s poorer performance, Amoils highlights:

  • The significant loss of currency value versus the US dollar – from around R6.80 per US$ in 2010 to R14.70 per US$ in 2020 (year-end rates).
  • The fact that a large number of local businesses closed down during the period, especially in the small- and medium enterprises space.
  • The poor returns from the JSE All Share index (down by 12% over the past decade when measured in US dollar terms).
  • The ongoing migration of wealthy people out of the country.

“Based on our estimates, around 4 200 HNWIs have left South Africa over the past decade [2010 to 2020]. Most of these individuals have gone to the UK, Australia and USA,” says Amoils.

“Some have also gone to Switzerland, Israel, Mauritius, New Zealand, the UAE, Canada, Portugal, Spain, Cyprus and Malta,” he adds.

Amoils believes another factor highlighting the decline in South Africa’s HNWIs is the “sluggish local prime residential property market”. He says that homes valued at over R10 million (equates to around US$700 000) have become very difficult to sell in the country.

List of African countries with the highest wealth per capita. Source: New World Wealth

Meanwhile, the report notes that Mauritius is the wealthiest country in Africa, in terms of average wealth per person (wealth per capita). South Africa comes in second spot from a wealth per capita perspective (over $10 000 per person).

“Mauritius’ growth rate is impressive when considering that wealth per capita levels there are already quite healthy at over US $30000 per person. The World Bank officially classified Mauritius as a high-income country in July 2020,” Amoils points out.

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.

AUTHOR PROFILE

COMMENTS   23

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

“From studying 50+ civil wars and revolutions, it became clear that the single most reliable leading indicator of war/revolution is bankrupt government finances, often after an economic shock, and when there are big wealth gaps”. – Rai Dalio

The wealthy elite in South Africa has experienced a change in demographics. The politically connected ANC cadres and the labour union members are the new wealthy elite who exploit the poor and the unemployed. The day is fast approaching when the state will devalue the currency to fund the social grant. That day will mark the beginning of the escalation in the anarchy and civil war that we euphemistically call “crime” and “service delivery protests” at the moment.

The shareholders of Standard Bank are definitely getting poorer.
The share is losing 1% per day.
At this rate we need 117 more days and then it is at R0.

However, I’m shocked to see the dealings in securities in todays sensitive article about the directors of Standard Bank.

I’m losing thousands per day while they are getting Millions!

I agree 100% The rand will soon continue its decline against other major currencies, despite a weak dollar and interest rate differential. The
domestic political and economical turmoil is too overwhelming to have it any other way. The ANC is on a path of self-destruction and its taking the economy with it..

A very similar quote from Scheiler : “four different kinds of violent ruptures have flattened inequality: mass mobilization warfare, transformative revolution, state failure, and lethal pandemics. I call these the Four Horsemen of Leveling. Just like their biblical counterparts, they went forth to “take peace from the earth” and “kill with sword, and with hunger, and with death, and with the beasts of the earth.” Sometimes acting individually and sometimes in concert with one another, they produced outcomes that to contemporaries often seemed nothing short of apocalyptic”

I am actually surprised that the figures are not worse. Another interesting fact would be to see the current portfolio composition of wealthy individuals who have stayed in SA. I suspect significant portions of their portfolios have been emigrated.

Unless I missed it, I saw nothing about an incompetent and corrupt ANC and high crime rate as reasons. People with good ideas, who then become millionaires, know that the ANC cannot provide them with the necessities. Surely? If you did not mention this, how could you miss it? I am not a millionaire but these are the reason I would leave.

Millionaires and good professionals left because of the Zuma looting era which made a lot of sense. The lost generation.

Most South Africans work long honest hours, sit in traffic due to broken traffic lights, have to make it through potholes, and the poorer go through a lot worse, load load shedding also.
Those are the lucky ones to have a job, they worked hard to get the job in the first place.

Then your tax money got looted and gone to Dubai and Pakistan.
The SARS people did not even do anything about it.

The Ramaphosa administration is more ethical, educated, fair and honest – thank you

“The Ramaphosa administration is more ethical, educated, fair and honest..”

You’re funny

There is another side to this coin, of course.

The article states that South African wealth, as measured in dollar terms, declined by 25% over the last decade. We should keep in mind that the Dollar has appreciated by 30% against the Dollar Index over this period. The currency movement alone, syphons wealth out of emerging markets when the dollar strengthens against the basket of currencies. A stronger dollar sucks liquidity out of commodity-producing countries because the stronger dollar removes the profit margin from commodity producers, as those commodities are all priced in terms of the dollar. The poor relative performance of the JSE All Share Index over the last decade is a case in point.

Asset values in emerging markets rise and even outperform the US market when the dollar enters a period of cyclical weakness.

Although the communist central planning ANC government is a terrible and disgraceful disaster, there are other powerful forces that also influence our relative economic performance.

Yes viewed over 5 years with rand appreciation over that period would probably yield a different story.

Very accurate!

Imagine twins were pound millionaires back when a pound was worth 5 dollars, but one twin had all his assets in S&P and the other was all in LSE.

The LSE twin is now the poor relation in relation to brother.

Will the dollar continue?

Absolutely. Change this survey to a GBP measurement, and wealth has stayed the same.

01/01/2010 – 31/12/2020
FTSE 100 TR in GBP = 80.42%
FTSE/JSE All Share GTR in GBP = 76.42%

And comment form the ANC is that they are absolutely ecstatic about this development as it clearly shows a narrowing of the inequality in wealth.

They will now hold discussions to see if the process can be speeded up significantly such that all South Africans can be classified as poor in 3 years.

Shows where the policy is at, I wonder if they included the wealth in the hands of the few, that has been stolen.

As far as SA goes, this report is the conclusion of ANC Policy and attitude!

But don’t panic! Dear Cyril, Patrice, Tokyo and Bridgette are still here … for now anyway.

The economists article of 1999 is as valid today as it was then. No renaissance. Just the hopeless continent!

GDP of South Korea is 5 times ours with 20% less people.

That summarizes everything about this failed continent

As we’ve seen the ANC/COSATU/SACP model of wealth creation is for 0.00001% of the population i.e. wealth at the expense of or taken from others. When real wealth creators and job creators see this they leave in their droves. No one can blame them. This is how the world works and it won’t even if the ANC somehow thinks the rules of how the world works do not apply to them. The economic world does care for what you did pre-1994.

The article says there are 36000 USD millionaires (assets of R15m).
Where does this number come from? SARS ? The top 2000 ANC “leaders” are all $ millionaires. The “supporters” of ANC NEC members e.g.Ace are also $ millionaires (about 500 “supporters”). Municipal managers who buy R10m houses are also $ millionaires. In fact, the top 10 000 ANC cadres within the National, Provincial and Local Government, SOEs etc are all $ millionaires. There are thousands more $ dollar millionaires than stated in the article – and we have not even touched on those involved in VBS bank, PPE corruption, Borasa etc.

Hard to feel sympathy when one looks at conspicuous consumption all around.

I am not surprised I expected worse.

But, I think the numbers will still get worse given the hunger and thirst of SARS to tax heavily on the rich/wealthy. More will leave or move their assets.

In many respects money is like water. It follows the route of least resistance. It goes to where it is treated with respect and where property rights and rule of law are vested, prtected and nurtured. None of these three conditions exist in Mzansi and are not likely to exist in forseeable future IMHO. The trend will increase over time until we all have nothing, the ultimate equalizer and the inevitable end of the unthinking populist policies of the ANC. The predictable end of communism is poverty and misery. This is what happens when ruling politicians don’t know history from a hole in the ground.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles: Advanced Search
Click a Company: