Contrary to the global view of many countries in Africa having the world’s poorest and least developed economies, wealth experts are expecting the number of multimillionaires on the continent to rocket over the next decade.
Looking at the world’s richest people who have £18 million or more in net assets, their number has surged by 59% globally since 2003, but in Africa, the super-rich club has increased by 130%.
This astonishing rise from rages to riches eclipses the rest of the world – the Middle East is not far behind with a jump of 116%, but the rest lag a long way back – with rises of 89% in Asia and 44% in Europe.
The data comes from a study by international property consultants Knight Frank and market research firm WealthInsight.
The study predicts almost 3,000 more ultra wealthy individuals will join the throng in Africa by 2023.
The African rich list
Nairobi, Kenya, will head the African rich list with an increase of 78%, with Marrakesh, Morocco, with 60% and South Africa adding 41% in Johannesburg and 37% in Cape Town.
WealthInsight’s Oliver Williams explains the explosion of wealth in Nigeria is set to create a huge market for luxury brands.
“Nigeria’s multimillionaires enjoy a luxury lifestyle already and that’s set to take off even more,” he said.
“The country already has Africa’s biggest market for private jets, champagne and fine art. Nigerians already shop in London and many European capitals, but many brands are considering opening outlets in Lagos and Abuja.”
He also points out private bankers have enormous potential to exploit in Nigeria.
Foreign investment pouring in
“Millionaires in the country are worth almost £55 billion and we expect that to soar to nearer £75 billion by 2018. It’s no wonder private banks and wealth managers are rushing to set up shop in the country.”
Expanding wealth is not restricted to Nigeria; other African countries like Ghana, South Africa, Kenya and Zimbabwe are also in the international top 10 for increasing the number of multimillionaires.
“Africa’s potential to create massive wealth should not be underestimated,” says the study.
“Foreign investment is pouring into the continent and is likely to continue to increase. The only negative point is governments must send on infrastructure to encourage wealth creation from expanding economies to keep the ball rolling.
“Nations also need robust banking systems to foster wealth. For instance, Cote d’Ivoire and Ethiopia have high GDP growth but weak banks that is not feeding that growth through to individual wealth.”