Africa’s millionaire exodus: Wealth eroded by currency depreciation

In the past decade, Africa has seen a significant dip in its millionaire population, with nearly 20,000 individuals departing or witnessing their wealth dwindle due to currency devaluations. According to Henley & Partners, the continent now hosts just 135,200 millionaires, an 8% decline since 2013. Despite challenges such as currency depreciation and underperforming markets, projections indicate a potential 65% increase in millionaires over the next decade, with countries like Mauritius and Namibia leading the charge with stable governance and favourable economic conditions.

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By Adelaide Changole

The number of millionaires living in Africa dropped by nearly 20,000 in the past decade as the continent’s ultra-rich either moved away or saw dramatic currency depreciations eat away at their wealth.  

There are now just 135,200 individuals with wealth of $1 million or more, an 8% decline from 2013, according to a report by Henley & Partners. Along with the continent’s 342 centimillionaires and 21 billionaires, those individuals have total wealth of $2.5 trillion, the consultancy found. 

“Currency depreciation and underperforming stock markets have chipped away at Africa’s wealth compared to global benchmarks,” Dominic Volek, group head of private clients at Henley & Partners, said in the report. “With African stock markets underperforming against global peers, local property markets facing headwinds, and currencies depreciating against the dollar, African investors have seen their wealth eroded on multiple fronts.”

Africa’s economies have faced multiple challenges over the past decade that have put strain on their budgets and currencies, from Covid-19 to rising interest rates to geopolitical tensions. South Africa, which has more than twice as many wealthy individuals as any other African country, has lost 20% of its millionaires in the last 10 years as the country battled logistics constraints, rolling blackouts and endemic crime and corruption. 

During that time, the South African rand has fallen 43% against the greenback and the FTSE JSE All Share Index has also trailed the S&P 500. 

Egypt and Nigeria, which are home to the next highest number of rich people after South Africa, have been grappling with runaway inflation, foreign-exchange shortages and multiple currency devaluations to allow their local units to trade more freely. 

Despite all the challenges, Africa’s millionaire population is expected to rise by 65% in the next decade, according to the report. The gains will be driven by a surge in wealth in Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda, which are all expected to experience at least 80% millionaire growth, the report said. 

“Mauritius, with its stable governance and favorable tax regime, is projected to experience a remarkable 95% growth rate, positioning it as one of the world’s fastest-growing wealth markets,” the report said. “Namibia, too, is poised for impressive high-net-worth growth.”

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