A large number of billionaires have left Africa over the past 20 years or so, according to the Africa Wealth Report 2023
As a result of their migration from the continent, they are affecting the ability of countries in Africa to create employment, the report highlighted.
The report is a guide to Africa’s wealth and luxury sector, published annually by Henley & Partners.
The billionaire movement out of the continent is deemed as a contradiction to the continent’s quest for investment with countries like Namibia actively searching for foreign direct investment, while South Africa just finished its Investment Conference last week.
Notably, there are 52 African-born billionaires globally, of whom only 23 still live on African soil, the report revealed.
The report highlighted that “the trend is of significant concern as many billionaires are entrepreneurs and company founders who therefore have the ability to create significant employment in their host countries,” adding that billionaires rarely move for tax reasons, they usually relocate to expand their businesses or due to safety concerns.
The report indicated that approximately 18,500 high-net-worth individuals have left Africa between 2012 and 2022.
Most have relocated to the United Kingdom, the United States and the United Arab Emirates, while significant numbers have also moved to Australia, Canada, France, Israel, Monaco, New Zealand, Portugal and Switzerland.
Regarding internal millionaire migration within the continent, approximately 1,200 high-net-worth individuals have moved between African countries over the 10-year period, with most relocating to Mauritius and South Africa.
Henley & Partners researchers have also indicated that the millionaire population is expected to rise by 42% over the next 10 years, reaching around 195,000 by 2032.
Mauritius is predicted to be the standout, with 75% growth forecast for the next decade.
A strong high-net-worth individual growth of 60%+ is also forecast in Namibia, Rwanda, Zambia, Seychelles, the Democratic Republic of the Congo, and Morocco.
There are 2,100 millionaires living in Namibia, each with a wealth of USD1 million or more- the majority of them are in Windhoek, Swakopmund, and Walvis Bay.
In comparison to Mauritius, Namibia has to do a lot more by either producing its own millionaires or attracting them- the island country has 4,900 millionaires each with wealth of USD1 million or more.
Namibia is expected to be one of Africa’s fastest-growing markets going forward, with high-net-worth growth of 60%+ forecast for the next decade to 2032.
The Namibian government is actively seeking foreign investment to boost the country’s economic growth and diversify the economy.
The country also provides many opportunities for international investors seeking a foothold and growth on the African continent, including tax incentives, financing, and a one-stop bureau service for international companies.
Namibia offers an attractive territorial tax system, which means that residents will not generally be taxed on income generated outside the country.
The ‘Big 5’ wealth markets in Africa are South Africa, Egypt, Nigeria, Kenya, and Morocco — together account for 56% of Africa’s high-net-worth individuals and over 90% of the continent’s billionaires.
Economic mobility is found to be critical- with cross-country access and mobility are increasingly viewed as an insurance policy against economic and political uncertainties in the current precarious global landscape.
According to the Wealth Report, the Covid-19 pandemic revealed the disparate impacts of global shocks due to country-specific differences.
As such, investors and businesspeople are looking for ways to ensure a steady stream of profits and stable consumption in unpredictable times.
Economic mobility in terms of visa-free access to more stable and larger economies is one way to achieve this objective, the report highlighted.
With investment migration being an attraction to investors who intend to maximise and stabilise their profits by diversifying their activities across more reliable economies, making this kind of investment a form of insurance against global volatility. Email: email@example.com