2023-08-23 11:14:31
The 14th edition of the Global Wealth Report by Credit Suisse and UBS has shed light on an unexpected economic reality: in 2022, global wealth recorded a decline for the first time since 2008. It fell by 2.4%, while the average wealth per individual fell by 3.6%, to stand at 84,718 dollars (77,786 euros) per person. This decline is mainly explained by the appreciation of the dollar and galloping inflation.
According to economist and report author Anthony Shorrocks, “with stable exchange rates, in line with those of 2021, total wealth would have actually increased by 3.4%, and wealth by adult would have increased by 2.2% in 2022”. How does Africa fit into this dollar dance?
The ever-richer Anglophones
While wealth has declined in North America, Europe and the Asia-Pacific region, the largest increases in wealth have been recorded in Russia, India, Brazil and Africa. On the continent, total wealth increased by 1.5%. However, the significant population growth has led to a slight decline, of 1.3%, in wealth per adult.
Moreover, the ratio of the most affluent African adults remains well below that of other regions of the world. For example, the number of African personalities whose fortune is between 100 million and 500 million dollars is 45 times less than in the United States, twenty times less than in Europe and three times less than in Latin America. A recent study by Henley & Partners predicts a 42% increase in the number of affluent individuals over the next decade.
The majority of the African ultra-rich are concentrated in South Africa, Egypt and Nigeria. According to the Global Wealth Report, the combined fortunes of the very wealthy stand at $900 billion in the Rainbow Nation. By way of comparison, in Burundi the somme of the fortune of the richest is 5 billion dollars, 2 billion in the Central African Republic and 347 billion in Morocco. The growth of these fortunes is notably driven by real estate. Even if interest rates continue to rise, demand for land is constantly growing. Especially in metropolitan cities like Lagos, Johannesburg or Nairobi, the document says.
Driven by real estate
Despite the crisis it is going through, South Africa stands out with the development of its residential areas. With nearly 3,700 homes valued at more than $1 million, it is one of the world’s luxury real estate markets. For its part, Namibia, envisaged as the future African Eldorado with a growth forecast exceeding 60% by 2032, is attracting increased interest thanks to its new attractive residency program by investment.
Globally, the Global Wealth Report anticipates a 38% growth in global wealth over the next five years, peaking at $629 trillion in 2027. This growth would be driven primarily by low- and middle-income markets. By 2027, the study predicts that ultra-high net worth individuals (with assets of at least $30 million) will number 372,000, including 500 Africans.
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