The world is developing, the ways of doing business are changing, and new layouts and trends are emerging every day. As different and unconventional approaches emerge, the ways of financing and monetisation are beginning to change. With the integration of technology and digital transformation into lives and working environments at such a rapid pace, the ways of making money are also diversifying.
In today’s article, we will talk about the rise of the upper class in Africa, namely millionaires.
– 138,000 HNWIs with investable wealth of USD 1 million or more living in Africa
– 28 centi-millionaires worth USD 100 million or more
– 23 US dollar billionaires
– Investible wealth in Africa USD 2.4 trillion
– Millionaire population is expected to rise by 42 percent over the next 10 years
– Big 5 wealth market (South Africa, Egypt, Nigeria, Kenya and Morocco) holds 56 percent of the continent’s high net worth individuals (HNWIs) and over 90 percent of its billionaires.
South Africa : 30 percent of the continent’s centi-millionaires
Egypt : Most billionaires
Mauritius : Highest wealth per capita in Africa
Rwanda, Uganda and the Democratic Republic of the Congo: The most frontier markets are seeing the biggest growth in terms of percentage, while the most mature ones the biggest drops, percentage and volumes : Nigeria – Angola – South Africa
The rise of Rwanda and Uganda, especially among the positive ones among the table data, draws attention seriously. Only 5 of the 10 countries in the table come from the sub-Sahara region. The increase in welfare, especially in East African countries, seems to replace the old reign in Nigeria, Angola and South Africa. So why has the millionaire population in Rwanda and Uganda shown such a significant leap forward? It must be admitted that the top 3 largest sub-Saharan African geographies are always South Africa, Nigeria and Kenya.
However, in today’s conditions, new competition partners are also joining these 3 leading countries. Rwanda and Uganda stand out as the two new trade and investment suns of Africa emerging from the east. Rwanda, which has reached a serious era, especially under the leadership of Paul Kagame, is increasing its welfare level every day with the industry, finance, technology and health investors it attracts to the country from all over the world. As there is smooth political stability in the country, you can expect production to take place, the right reforms to be implemented and therefore fast economic growth. To maintain steady economic growth for almost two decades, the Rwandan government invested time and resources in soft and hard infrastructure in order to attract foreign direct investment.
The 2022 Corruption Perception Index ranked Rwanda the third least corrupt country on the African continent behind the Seychelles and Botswana. You will appreciate that this renews the confidence of the investor coming to the country and increases the flow of money and investment.
We can use the same positive expressions for Uganda, which borders Rwanda. There is serious trust in both foreign investors and the local workforce, which has been steadily managed by Yoweri Musaveni for 36 years. The Ugandan elites, led by the Indian community, who live in the country and have carried forward the country’s commercial and economic moves for a long time, hold the country’s development flag in their hands and carry it forward day by day. An environment of stability and economic confidence in the country increases the investment, and investments increase the number of millionaires in the country.
Despite its limited area and small population, Mauritius finds itself at the top of the rich league with the number of millionaires it has. Mauritius has about 1.5 million inhabitants. The average wealth per capita in Mauritius is $30,000 per person. The island was ranked as a high-income country by the World Bank. In terms of income per capita, we see that Mauritius is actually in the same income group as countries such as Italy, Spain, Saudi Arabia and South Korea.
So how come the income level of an African country is at the same level as European Uinion member countries? Low taxes low taxes, including inheritance and capital gains tax. Security is also one of the main drivers of wealth growth in Mauritius. It is rated as the safest country in Africa, along with Namibia and Botswana.
On the other hand, if we take a brief look at the developing economies of Africa, the three economies that will develop the most in 2023 are Rwanda, the Ivory Coast and Tanzania. As I have already mentioned, Rwanda, the shining star of the African geography, seems to hold the tightrope with an estimated 7.8 percent growth rate. The Ivory Coast, which comes right after Rwanda, seems to fill the world with cacao and its derivative products, with its feature of being the world’s largest cocoa producer and its estimated growth rate of 6.5 percent.
One of the main reasons for the downward trends in countries such as South Africa, Nigeria and Angola, I think, is that these s are seriously affected by post-COVİD economic recessions. The losses of the South African Rand up to 35-40 percent against the US Dollar in the last two years, the serious economic stalemate in the Angolan markets and the apparent decrease in purchasing power, Nigeria’s encounter with similar problems, reduced the number of foreign investors in these three countries and caused the investor to downgrade.
One of the most serious problems in Angola in recent times is the difficulty of foreign exchange outflow from the country and the serious depreciation of the local currency, Kwanza, against the USD. As someone who personally does business with Angola regularly, I can feel the economic bottleneck in the country very closely. Many people stopped their purchases of important brands, which are considered premium products, and switched to moderately priced middle and low segment products. The situation in Angola is very similar to that of Nigeria. Therefore, many global manufacturers are trying to remain competitive by supplying their products to these two markets from their factories in China or the Far East.
Unfortunately, under today’s conditions, it is difficult for the products produced within the borders of Europe to reach large sales in these two markets. I regret to say that as long as the tides and turmoil in the global markets continue, it seems we will see more volatile days in the economy of these three big African countries.
