Summary:

• Henley & Partners’ Africa Wealth Report highlights Uganda among seven countries poised for significant millionaire growth in the next decade, primarily driven by sectors like agriculture, tourism, and mining.

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Uganda is one of seven countries expected to experience 80%+ millionaire growth over the next decade, according to a new report by the leading international wealth and citizenship advisory and consultancy firm, Henley & Partners.

The report says although it expects African countries, including Uganda, to perform poorly when it comes to the key wealth creating sectors such as hi-tech and manufacturing, these countries are expected to instead heavily rely on agriculture, tourism, and mining to grow national wealth. The report defines key wealth creating sectors as those that generate the most foreign exchange. Uganda expects to become a net oil exporting country in 2005.

Globally, strong growth will be fueled by key sectors such as fintech, eco-tourism, business process outsourcing, software development, rare metals mining, green tech, media and entertainment, and wealth management.

The information is contained in what Henley & Partners call the `Africa Wealth Report’. They promote it as the definitive guide to Africa’s wealth and luxury sector. Published annually in partnership with the wealth intelligence firm, New World Wealth, the report provides a comprehensive review of the wealthiest countries and cities in Africa and offers expert insights on economic mobility, the investment migration sector, and wealth management on the continent.

Henley & Partners are also the producers of the Henley Passport Index and Global Mobility Report and the Henley Opportunity Index.

The Henley Passport Index and Global Mobility Report is often considered the standard reference tool for global citizens and sovereign states when assessing where a passport ranks on the global mobility spectrum. Updated quarterly, the Henley Passport Index ranks 199 different passports and 227 different travel destinations. Its data is based on exclusive data from the International Air Transport Association (IATA).

Meanwhile, the Henley Opportunity Index which is a tool that investors can base on to identify locations around the world that offer the best ecosystems for future generations to maximize their career prospects and prosperity. It is marketed as a benchmarking tool that quantifies the impact and probability of success that a premium education coupled with additional residence rights and/or alternative citizenships acquired through investment migration can have on preserving and growing multi-generational wealth.

The Africa list

Listed with Uganda as countries expected to see exponential millionaire growth going forward, over the next decade to 2033, are Mauritius, Namibia, Morocco, Zambia, Kenya, and Rwanda.

However, when looking at the decade from 2013 to 2023, countries like Mauritius (87%), Rwanda (84%), Morocco (35%), and Namibia (32%) all experienced significant growth in their millionaire populations. This at a time when countries like South Africa and Egypt saw declines of 20% and 22% respectively.

This does not mean the emerging countries now have more millionaires than South Africa or Egypt. It merely shows the trajectory of their millionaire growth.

South Africa, Egypt, Nigeria, Kenya, and Morocco remain the `Big 5’ wealth markets, accounting for 56% of the continent’s millionaires and over 90% of its billionaires.

South Africa leads African wealth, boasting 37,400 millionaires, 102 centi-millionaires, and 5 billionaires, despite the challenges of the past decade. It holds over twice as many High Net Worth Individuals (HNWIs) as Egypt, which follows with 15,600 millionaires, 52 centi-millionaires, and 7 billionaires.

Nigeria ranks third with 8,200 HNWIs, followed by Kenya with 7,200 millionaires, Morocco with 6,800, Mauritius with 5,100, Algeria with 2,800, Ghana with 2,700, Ethiopia with 2,700, and Namibia rounding out the top 10 with 2,300 HNWIs.

At the city level, Johannesburg emerges as the wealthiest, with 12,300 millionaires, 25 centi-millionaires, and 2 billionaires. Cape Town follows closely with 7,400 millionaires, 28 centi-millionaires, and 1 billionaire. Cairo (7,200 millionaires), Nairobi (4,400 millionaires), and Lagos (4,200 millionaires) also stand out as urban wealth hubs.

The allure of these expensive cities adds another layer to the continent’s wealth narrative, the report says. Cape Town, with prime residential spaces valued at US$5,600 per square meter, and Grand Baie in Mauritius, close behind at US$ 5,000 per square meter, emerge not just as international centers of luxury but also as benchmarks of investment appeal and lifestyle desirability. These cities, alongside others like Morocco’s Marrakech and South Africa’s Sandton, stand as tangible examples of prosperity.

Measuring wealth

The wealth ranking does not name individuals. In any case Uganda’s rich, just as other African rich persons, mostly do not feature on lists of the rich such as the Forbes rich list because of the methods used to calculate the net worths of individuals.

To value privately-held businesses, Forbes; the American business magazine renowned for the lists, first estimates the revenues or profits. Then, using prevailing stock prices and currency exchange rates, it applies prevailing price-to-sale or price-to-earnings ratios for similar public companies. Doing these conversions is sometimes difficult in countries without well-developed and vibrant stock exchanges and basic levels of business information transparency.

To track wealth of African billionaires, Forbes also includes only those who reside in Africa or have their primary business there. This method excludes persons like Sudanese-born billionaire Mo Ibrahim, who is a U.K. citizen and South African Nathan Kirsh, who operates out of London. Strive Masiyiwa, a citizen of Zimbabwe and a London resident, appears on the list due to his telecom holdings in Africa.

According to Forbes, Mohammed Dewji, the CEO of MeTL; a Tanzanian conglomerate founded by his father in the 1970s, is the richest person and only billionaire in East Africa with a net worth of US$1.8 billion. He is Africa’s 12th richest person. His company, MeTL is active in textile manufacturing, flour milling, beverages and edible oils in eastern, southern and central Africa.

Sudhir Ruparelia who is often cited as Uganda’s richest person is the only one to have ever featured on the annual rich lists compiled by Forbes. In 2014 Forbes ranked Sudhir as the 24th wealthiest person in Africa with an estimated net worth of $1.1 billion. At the time, it reported that Sudhir was earning US$600 million per year from rent. In 2015 Forbes reported that Sudhir’s wealth had shrunk to US$800 million. At the time, Sudhir was listed to own a commercial bank, a string of hotels and country clubs, and more than 200 commercial properties. Since then many Ugandan media have produced various lists of the riches Ugandans based on speculation and the flavor of the moment and without evidence and verifiable methodology
The focus on prevailing stock prices and currency exchange rates also explains why Africa’s millionaires have performed relatively poorly over the past decade (2013 to 2023) when compared to the rest of the world. Performance has been constrained by poor growth in the three largest African markets, namely South Africa, Egypt, and Nigeria.

The Johannesburg Stock Exchange (JSE All Share Index), which makes up well over half of Africa’s listed company holdings, was up by a healthy 65% in local currency (ZAR, rand) terms. However, when measured in USD (dollar) terms, the index was down by 5%. This was driven by a 43% depreciation of the rand versus the dollar — the rand went from ZAR 10.50/USD at the end of 2013 to ZAR 18.30/USD at the end of 2023.

Currencies in most other African countries also performed poorly versus the USD over the 10-year period, with dramatic depreciations of over 75% recorded in Nigeria, Egypt, Angola, and Zambia.

As a result, Africa now has 135,200 high net-worth individuals with investable wealth of US$1 million or more, 342 centi-millionaires (over US$100 million) and 21 (US$) billionaires.

In comparison, USA which ranks 1st globally has a whopping US$67 trillion in Liquid investable wealth. It experienced a 62% millionaire growth between 2013 and 2023 and now boasts 5.5 million millionaires, 9,850 Centi-millionaires, and 788 billionaires.

Continent of opportunities

The report bases its positive forward outlook on Africa’s youthful population and vast resources which it says represent a significant opportunity. Other factors are the continent’s growing middle class and increasing consumer spending power which make it an attractive market for foreign firms seeking new growth frontiers. Africa’s natural wealth, from minerals to hydrocarbons to arable land, also provides a solid foundation for prosperity if harnessed responsibly and equitably, says the report.

Recent discoveries of offshore oil and gas further underscore the continent’s resource potential. Harnessing these resources sustainably and translating them into broad-based prosperity will be a defining challenge for African leaders.

Countries like Namibia, with its uranium, diamonds, copper, and gold reserves, are attracting global attention.

The report says inward migration of wealthy people also helps to drive a country’s wealth, along with improving safety and security and offering competitive tax rates.

The growing trend of wealthy Africans seeking alternative residence or citizenship abroad underscores the need for African governments to create an enabling environment that encourages local investment and mitigates talent and capital flight. Strengthening institutions, enhancing transparency, and implementing investor-friendly policies will be key to retaining and attracting wealth.

According to their latest figures, approximately 18,700 high-net-worth individuals have left Africa over the past decade (2013 to 2023). Most have relocated to the UK, the USA, Australia, and the UAE. This figure does not include individuals who moved internally within the continent.

Approximately 1,600 millionaires moved between African countries over the 10-year period. While most relocated to Mauritius and South Africa, some also moved to Morocco and Namibia.

Notably, there are 54 African born billionaires in the world, but only 21 of them still live on the continent. This is a significant concern, as billionaires are often entrepreneurs and company founders who therefore have the ability to create large numbers of jobs in their host country.

GDP versus wealth boost

The report points out that clearly, Africa’s wealth story is complex and potentially just beginning. The authors say immense challenges coexist with incredible opportunities.

“Africa’s wealth story is one of aspiration and untapped potential,” says the report, “By confronting these challenges head-on and seizing opportunities wisely, Africa can chart a path toward a more prosperous and inclusive future.”

“Most industries boost GDP, but very few boost wealth,” the report says, “Generally, only industries that bring new money (forex) into a country help to build its wealth.”

Investment migration is emerging as a potential further catalyst for Africa’s economic growth. By offering residence and citizenship by investment opportunities, African countries can attract vital foreign capital, stimulate job creation, and foster knowledge transfer. This not only benefits the host nations but also provides African HNWIs with enhanced global mobility and risk diversification options.

Based on their research, the top factors that encourage wealth growth include:

• Millionaire migration: the migration of wealthy people to a country helps to build its wealth, while wealth migration away from a country does the opposite. With the exception of Mauritius, African nations consistently lose large numbers of high-net-worth individuals annually due to emigration. This prevents them from reaching their full potential as much of their hard-earned wealth growth is eroded. (See below for a full review of Africa’s recent wealth migration trends.)

• Strong safety and security: the safety levels in a country and the efficiency of local police are among the most critical factors in encouraging long-term wealth growth over a 50+ year period. Concerningly, African nations often rank among the most dangerous countries on earth, especially when it comes to key metrics such as murder rates, women’s safety, and child safety. African countries also perform poorly on the Global Peace Index. According to New World Wealth’s in-house Africa Safety Index for 2023, Mauritius ranks as the safest country in Africa, followed by Namibia, Botswana, and Morocco.

• Growth in key sectors: key wealth creating sectors include those that generate foreign exchange such as hi-tech, manufacturing, mining, and tourism. Most African countries perform poorly when it comes to hi-tech and manufacturing, and are instead heavily reliant on mining, agriculture, and tourism to bring in forex. Mauritius is a notable exception as it generates significant forex via offshore banking and real estate.

• Competitive tax rates: globally, the UAE, Monaco, and Singapore provide examples of the power of favorable tax in encouraging wealth creation — all three wealth nexuses have very low tax rates. In Africa specifically, Mauritius and Namibia stand out as both countries have no capital gains tax and no estate duty (and both have residence by investment offerings).

• A well-developed banking system and stock market: an efficient banking sector and stock market encourages individuals to invest and grow their wealth locally. South Africa is successful in this regard as it is home one of the world’s top 20 stock exchanges.

• Media freedom: it is important that major news outlets in a country are neutral and objective. An established financial media sector is key in disseminating reliable information to investors, which ultimately contributes to wealth growth.

• Strong ownership rights: once assets are taken away, they tend to lose value, negatively impacting on wealth. Zimbabwe offers a case in point in this regard.

Tables

Countries expected to see exponential millionaire growth

Uganda

Mauritius

Namibia

Morocco

Zambia

Kenya

Rwanda

Top factors that encourage wealth growth

Millionaire migration

Strong safety and security

Growth in key sectors

Competitive tax rates

A well-developed banking system and stock market

Media freedom

Strong ownership rights