Millionaire development in smaller African friends holds classes for Nigeria

Millionaire development in smaller African friends holds classes for Nigeria

Whereas the variety of greenback millionaires in Mauritius, Rwanda, Uganda and Namibia grew within the final decade, it declined in Nigeria, Africa’s largest financial system.

The 4 smaller African international locations are additionally projected to supply extra millionaires within the subsequent 10 years, difficult the ‘large 5” wealth markets on the continent — South Africa, Egypt, Nigeria, Kenya, and Morocco –which have skilled declines within the variety of millionaires over the previous decade, in response to the Africa Wealth Report 2023 by Henley and Companions, a London funding migration consultancy.

“The massive 5 wealth markets in Africa collectively account for 56 p.c of Africa’s high-net-worth people and over 90 p.c of the continent’s billionaires,” it mentioned.

It, nevertheless, mentioned that their continued dominance is much from assured, and so they may quickly be challenged by the likes of Mauritius and Rwanda, that are quick gaining floor. “Namibia’s new residence by funding providing positions it as a future potential rival as properly.”

Among the elements that make these international locations fast-growing markets for millionaires are security and safety, low taxes charges, ease of doing enterprise, stability, good funding local weather and entry to international change markets.

“All these are ease of doing enterprise insurance policies. Upon getting a supportive and collaborative enterprise atmosphere each from the financial and safety perspective, it helps to draw investments in these international locations. This is the reason these international locations are seeing a rise within the development of millionaires,” Damilola Adewale, a Lagos-based financial analyst, mentioned.

He mentioned there are completely different bottlenecks affecting private-sector gamers in Nigeria.

Within the Africa Wealth Report, the nation recorded a decline of 30 p.c within the variety of greenback millionaires from 2012 to 2022 on the again of naira depreciation and different financial headwinds.

It additionally noticed the biggest decline in personal wealth in comparison with different international locations that additionally recorded declines that are Angola (28 p.c), Algeria (26 p.c), Egypt (25 p.c), South Africa (21 p.c) and Botswana (10 p.c).

“Regardless of the complicated circumstances surrounding a lower within the complete wealth pool in Africa, the economies of South Africa, Egypt and Nigeria have recorded damaging development amongst others as a result of depreciation of some currencies in opposition to the greenback,” Thierry Vallet, interim chief govt officer at AfrAsia Financial institution, mentioned.

Two financial recessions within the final seven years have weakened Nigeria’s international inflows, leading to a liquidity problem within the nation’s FX market. Final 12 months, the naira depreciated in opposition to the greenback, dropping to as little as 448/$1 from 157/$1 in 2012 on the official market. It depreciated to 740/$1 from N159/$1 on the parallel market.

The FX liquidity problem can be a serious contributing issue to the nation’s inflation price, which hit 21.34 p.c in December 2022, the best in 17 years, from 12 p.c in the identical interval of 2012, in response to the Nationwide Bureau of Statistics.

“The change price slide and excessive inflation price usually are not sudden since to take care of the millionaire membership, asset development has to match or outperform each inflation and change price,” Yemi Kale, chief economist and head of analysis at KPMG Nigeria, mentioned.

Overseas investments into Africa’s most populous nation fell to the bottom in six years to N5.4 billion in 2022, in response to the Nationwide Bureau of Statistics.

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Taiwo Oyedele, West Africa tax chief at PwC Nigeria, mentioned Nigeria has misplaced its lustre as a alternative vacation spot for funding.

“If we fail to deal with the challenges and rising issues of companies, particularly these which are inside our instant management to resolve like insufferable tax burden and funding unfriendly FX regime, that is the end result we’ll get – buyers will merely vote with their monies as to the selection of the place to take a position,” he mentioned.

Oyedele added that the nation ought to begin partaking and listening to buyers, handle their issues to the extent potential, introduce business-friendly insurance policies and watch billions of investments circulate into the nation.

Why are Rwanda, Mauritius, Uganda and Namibia rising personal wealth?


Mauritius, one of many smallest international locations in Africa, with a inhabitants of over 1.2 million is among the many wealthiest economies within the continent. The variety of resident millionaires grew by nearly 70 p.c over the previous decade. The World Financial institution formally categorized the nation as a high-income nation in 2020.

“Mauritius is thought for its nice tropical local weather, multiculturalism, and spectacular dwelling environments, however its dynamic financial system, enticing tax regimes, and aggressive enterprise panorama has bolstered the nation’s international stature and is attracting high-net-worth people and households from across the globe,” analysts at Henley and Companions mentioned.

They mentioned for many who want to reside within the island nation, the Mauritius Residence by Funding Program is probably the most environment friendly technique to purchase such standing. “Below this program, people who put money into the nation’s actual property market can grow to be Mauritian residents inside six to eight months.”

Other than these, the nation’s fast-growing monetary companies sector and the inventory market on account of the nation’s sturdy democracy and political stability and low taxes (no property responsibility or capital positive aspects tax), which encourage enterprise formation and attraction to retirees, improve personal wealth within the nation.

“A lot of rich people have moved to Mauritius over the previous decade. As well as, many domestically born millionaires have been created because the financial system has grown,” the report mentioned.

The nation’s conducive enterprise ranks it high in Africa and thirteenth globally within the 2020 World Financial institution Ease of Doing Enterprise. It additionally ranks because the most secure nation in Africa and among the many 20 most secure international locations on earth, in response to the 2022 New World Wealth’s in-house security index.


This East African nation was the top-performing market in Africa throughout the 10-year interval, with millionaire development of 72 p.c, adopted by Mauritius.

Rwanda, one of many fastest-growing economies with a inhabitants of over 13 million, has undergone fast industrialisation as its authorities invested time and assets into comfortable and exhausting infrastructure with a view to entice international direct funding.

“Rwanda is selling an excellent funding local weather. With all these elements, I’m of the view that Rwanda, certainly, is rising and they’re progressively taking the bragging rights from Ghana being the gateway to the sub-region,” Daniel Anim, director of analysis and financial evaluation at Enterprise and Monetary Occasions, Ghana, mentioned.

The nation additionally emerges among the many main international locations globally, due to its funding, political local weather and insurance policies on doing enterprise. It ranked second in Africa and thirty eighth globally within the ease of doing enterprise.


In Uganda, which recorded millionaire development of 45 p.c, is thought for having considered one of East Africa’s most developed finance industries.

In keeping with latest analysis by the Official Financial and Monetary Establishments Discussion board and Absa Financial institution, the nation might in a number of years grow to be the monetary centre of East Africa.

“It has made important developments in 5 key areas similar to entry to the FX market, transparency in taxation and regulatory regime, the power of native buyers, the state of the macroeconomic atmosphere, and transparency within the enforcement of authorized contracts,” it mentioned.

It added that Uganda outperforms its regional neighbours when it comes to market accessibility, openness, and transparency, adopted by Kenya, Tanzania, Rwanda, and the Democratic Republic of the Congo.


The variety of greenback millionaires in Namibia rose by 20 p.c within the final decade and it’s projected to develop by 60 p.c within the subsequent decade due to its low inhabitants density, a pretty tax system, a resilient, well-run banking system and a thriving eco-tourism business.

“Namibia gives a conducive enterprise atmosphere anchored by superior monetary techniques and a complicated banking sector, a robust macroeconomic framework, globally aggressive infrastructure, and good governance, in addition to a younger, educated, and trainable workforce,” mentioned Catherine Shipushu, senior supervisor, advertising, branding and communications at Namibia Funding Promotion and Growth Board.

“The nation’s strategic location and world-class port make it a great gateway to over 300 million individuals in different African markets. Moreover, it boasts a robust authorized system that protects the rights of buyers in that disputes could be settled by way of the courts or worldwide arbitration,” she mentioned.

Similar to Mauritius, Namibia can be utilizing funding migration programmes to draw high-net-worth people to the nation.

The programme, which is named Residence by Funding Providing, was launched in February. Consultants say the programme is an revolutionary financing software and has the potential to rework economies by injecting important international capital and inspiring sustainable financial development.

The principle goal of the programme, at the very least in its pilot version, is to draw international buyers from close by South Africa, one of many continent’s largest economies, in response to Henley and Companions.

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