Botswana is setting its sights on a new kind of wealth. In an ambitious push to diversify its economy, Botswana is rolling out the red carpet for high-net-worth individuals (HNWIs) and families, aiming to transform the country into a magnet for millionaires, a new study by investment management firm Ocorian shows.
According to the study, “Botswana is striving to move away from its reliance on diamond mining, consistently ranking among Africa’s top economies.” However, the study warned that Botswana “faces challenges in this transition, as it lacks the depth of knowledge needed to operate effectively as an IFC.”
The study says “ Despite these hurdles, Botswana’s small population presents an opportunity for growth in the financial sector.” The study indicates that Mauritius is leading the charge, already recognised as a well-regulated IFC, it continues to enhance its offerings by promoting sectors like fintech and renewable energy.
It says the influx of South African families, drawn by the lifestyle and business opportunities in Mauritius, further solidifies its status as a preferred jurisdiction in the region, especially as the region grows.
“Countries like Rwanda, Botswana, and Mauritius are leading this effort, each capitalising on its unique strengths. Rwanda aims to become a hub for technology and innovation, while Botswana seeks to diversify its economy beyond diamonds into financial services,” says the study. It says these jurisdictions are developing robust regulatory frameworks, improving the ease of doing business, and fostering international partnerships to enhance their competitiveness in the global financial landscape. Rwanda has often positioned itself to compete with Mauritius, as has Botswana.
The study says with more than 30 years of experience as an IFC, Mauritius provides innovative products that facilitate effective structuring. The country is compliant with international standards and allows unrestricted movement of capital, positioning itself as the gateway to Africa for investment and succession planning.
It says while Kenya also attempted to compete, it eventually recognised the advantages of collaboration with Mauritius rather than direct competition. The study says after successfully rebuilding following the civil war in the 1990s, Rwanda has become impressively safe and secure, encouraging long-term investments in the country.
The study says with wealth growing across the continent, it’s natural that a number of jurisdictions have spied an opportunity to work with the region’s UHNW individuals and families through favourable tax and regulatory environments, expert service providers and meeting international transparency standards.
“To that end, several African jurisdictions are actively working to establish themselves as IFCs to attract foreign investment and stimulate economic growth,” the study says.
According to the report, family offices in Africa are poised for a transformative future as they navigate a rapidly changing economic landscape.
It says with the rise of a new generation of wealthy individuals and a budding middle class, there is a growing demand for sophisticated wealth management services. “These family offices are likely to diversify their investment portfolios, focusing on sectors such as technology, renewable energy, and real estate, while also emphasising impact investing that generates social and environmental benefits,” says the report says.
The study says collaborations and networks among family offices will become more prevalent, fostering knowledge-sharing and cross-border investments.
The study says family offices grow and adapt to these trends, they are becoming more sophisticated. “Ocorian is continually creating new strategies to continue to grow family wealth for the generations to come, establishing them as key players in the field, and positioning the business at the forefront of wealth management in these regions,” the study says.
