Currency Devaluation Impacts Wealth of African Millionaires, 1,600 Nigerians Dropped From Dollar Millionaire List – Report

In a recent report by Henley and Partners, currency depreciation and underperforming stock markets swept off the wealth of Africa’s millionaires.

This erosion of wealth according to the report, can be largely attributed to the typical composition of African wealth portfolios. African investors reportedly allocated their assets equally across equities, property, and cash.

With African stock markets underperforming against global peers, local property markets facing headwinds, and currencies depreciating against the dollar, African investors have seen their wealth eroded on multiple fronts.

In the report, the South African rand declined by 43% against the US dollar from 2013–2023, and even though the Johannesburg Stock Exchange (JSE) all Share Index, which makes up well over half of Africa’s listed company holdings, rose in local currency terms, it was down 5% in USD terms over that period.

Currencies in several African countries also performed poorly compared to the US dollar over the past 10 years, with dramatic depreciations of over 75% recorded in Nigeria, Egypt, Angola, and Zambia.

Nigeria saw the largest decline in millionaires, followed by Kenya and Egypt with 500 each, and South Africa, 400. In Nigeria, the devaluation of the Naira impacted the wealth of dollar millionaires, which saw their number drop by 16.3 percent in 2023. This also led to 1,600 Nigerian millionaires being swept off the dollar millionaire list.

It is worth noting that the liberalisation of the foreign exchange regime in Nigeria as part of measures to revive the economy led to a large devaluation of the naira. In February 2024, Nigeria and Africa’s richest man Aliko Dangote saw $3 billion wiped off from his wealth in one week. Dangote was one of the most affected by the naira devaluation.

He began climbing in the billionaire ranking in January, gaining a whopping $7 billion in weeks, ranked 82nd in the world, and later plummeted to 132nd wealthiest men after the Naira devalued to par with the parallel market.

Amid these challenges, there are some notable centers of affluence across the continent. The ‘Big 5’ wealth markets — South Africa, Egypt, Nigeria, Kenya, and Morocco — collectively account for 56% of Africa’s high-net-worth individuals and over 90% of its billionaires.

South Africa leads the pack with 37,400 millionaires, 102 centi-millionaires, and 5 billionaires, followed by Egypt with 15,600 millionaires, 52 centi-millionaires, and 7 billionaires.

Going forward, over the next decade (to 2033), the likes of Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda and Rwanda are all expected to experience 80%+ millionaire growth. Mauritius, with its stable governance and favorable tax regime, is projected to experience a remarkable 95% growth rate, positioning it as one of the world’s fastest-growing wealth markets once more. Namibia, too, is poised for impressive high-net-worth growth, with a forecast exceeding 85% by 2033.

However, the report highlights the growing trend of Wealthy Africans seeking residence or citizenship abroad, which calls for the need of African governments to create an enabling environment that encourages local investment and mitigates talent and capital flight.

Implementing measures like bolstering institutions, improving transparency, and enacting investor-friendly policies will be crucial for retaining and attracting wealth. Despite the obstacles, Africa still holds vast potential for wealth generation.