Billionaire Boom on the Cards for Africa - Henley & Partners

Published on 14th June 2022

There will be a boom in the number of millionaires and billionaires coming out of Africa over the next decade, according to forecast high-net-worth-individual (HNWI) growth figures published in the latest Henley Global Citizens Report, which tracks private wealth and investment migration trends worldwide.

The Q2 report released by international residence and citizenship by investment advisory firm Henley & Partners exclusively features the latest projected 2022 net inflows and outflows of US dollar millionaires (namely, the difference between the number of HNWIs who relocate to and the number who emigrate from a country) forecast by New World Wealth.

Strong HNWI growth forecast for Africa

Amanda Smit, Managing Partner at Henley & Partners South Africa, says emerging economies in Africa, Latin America, and elsewhere in the Global South are rapidly catching up with the traditional high-income markets when it comes to the generation of private wealth. “As our latest report predicts, the number of HNWIs in the top 15 leading economies in Africa are forecast to grow anywhere between 40% and 80% over the next decade compared to just 20% in the US and 10% in France, Germany, Italy, and the UK.”

Mauritius has the highest forecast HNWI growth on the continent for the next decade, at 80%. Other highlights are Uganda, with HNWI growth of 60% predicted, and Kenya and Morocco, which are each expected to see HNWI growth of 50% by 2031. South Africa’s growth is predicted to be 40%, and Nigeria’s 30%. 

Surging demand for investment migration in Nigeria as investors seek stability

Homing in on Nigeria, Ladi Runsewe, Founder and Chief Executive Officer of UR Family Office (UFO), says there has been a significant surge in interest in alternative citizenship in the country because “high-net-worth families seek simplicity, stability, and value”. He goes on to say that affluent investors “are now actively seeking options that provide access to better healthcare and ensure stability and security for their families. Patriarchs and matriarchs still carry the hope that the standard of living will improve in their country but in the interim, they are securing their wealth offshore as a priority”.

Enquiries from African investors are also continuing their strong growth trajectory 2022 as a rising number are embracing investment migration as a means of enhancing their global mobility and mitigating regional risk. The most enquiries in Q1 came from Nigerian investors, followed by South Africans, and Algerians.

Commenting on popular programs among Nigerian investors, Stuart Wakeling, Managing Partner at Henley & Partners Nigeria says, “Interest in Canada and Malta remains strong, but in terms of actual uptake, our services still centre around the Caribbean programs, with the St. Kitts and Nevis Citizenship by Investment Program being another top contender.” Wakeling goes on to say that “Many private clients from across the globe are keen to fortify their alternative citizenship portfolios by investing USD 200,000 in real estate in the dual island Caribbean nation or donating USD 150,000 to its Sustainable Growth Fund. With a processing time of three to six months (and a unique 45-day fast-track option), eligible applicants acquire a second citizenship that grants them not only business travel and lifestyle advantages but also acts as a safety net. Should the fiscal and economic policies in their home countries ever pose a threat to their financial security and business legacy, the investment can safeguard their capital by giving them the option of an additional nationality.”

Ayuli Jemide, founder of DETAIL Commercial Solicitors, says Nigerians have traditionally sought an alternative residence or a second passport for several reasons, the first being education. “Second is mobility. Many investors, particularly businesspeople, want a passport that allows them to travel visa-free to many countries at the drop of a hat. The third reason, which links to the second, is strong family ties. For many affluent individuals, it is important to be able to visit family members who reside abroad at short notice and hassle-free.”

Uncertainty continues to propel South African investors

Smit points out that while South Africa has been an established investment migration market for several years, Algeria is an exciting new growth market. “By 31 March 2022, we had received 63% of the total 2021 enquiries from Algerian nationals”, she notes. Discussing South African market trends, Smit says, “South Africans continue to favor Portugal the most, but the Mauritius Residence by Investment Program is also attracting a great deal of interest. The Indian Ocean island offers a similar lifestyle and climate to South Africa, along with a dynamic economy, attractive tax regime, and competitive business landscape not too far from home.”

Giles Maynard, Senior Financial Advisor and Regional Manager at Carrick Wealth in South Africa, says, “It is no secret that one of the major reasons behind high-net-worth investors seeking alternative investment destinations, stems from political and economic uncertainty. Policy uncertainty, rand volatility, a stagnant economy, and unreliable power supply currently make the case for investing in South Africa a difficult one.”

Courtesy: Henley Global Citizens Report, a bespoke publication for anyone who is interested in private wealth and investment migration trends and the Henley Private Wealth Migration Dashboard, a unique new interactive analytical tool providing global citizens, investors, wealth managers and private bankers with exclusive statistics and insights into high-net-worth-individual migration and private wealth distribution and movement across the world.

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