A new report shows that South Africa is losing out in Africa when it comes to attracting the super wealthy.
As part of its Africa 2016 Wealth Report, New World Wealth reviewed the fastest growing African countries for millionaires.
The following table details the performance of millionaires in selected African countries between the end of 2007 – the peak before the financial crisis, and the end of 2015.
Mauritius was the top performing African country for millionaires during this period, with growth of 160%. Ethiopia also performed well with growth of 130%.
NWW defines ‘millionaires’ or ‘high net worth individuals’ (HNWIs) as those people with net assets of US$1 million (R14.5 million) or more.
Top 10 African countries for HNWIs
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The strong growth in millionaires in Mauritius was driven by:
- Strong economic growth.
- Secure ownership rights.
- Migration – a large number of wealthy individuals have moved there over the past decade. We estimate that 240 millionaires have moved there from South Africa alone since 2007.
- It has become a major retirement destination.
- Low taxes which encourage business formation and appeal to retirees. Company and personal income tax rates are only 15%, with no inheritance or capital gains tax.
- Automatic citizenship if one buys a US$500,000+ home in the country.
- A thriving and growing financial services sector, particularly in offshore banking, fund management and private banking.
- Low level of government regulation in the business sector (when compared to nearby countries such as South Africa which has exchange controls, high taxes, big trade unions and BEE hiring requirements).
- Lifestyle – beaches, weather and scenery.
- Low crime rate.
In line with the rise of wealth on the island, there are several new luxury developments going up, many of which are golf estates, NWW said.
Looking ahead, over the next 10 years (2015 – 2025), Mauritius is expected to continue to be the fastest growing country in Africa for millionaires. Ivory Coast and Kenya are also expected to perform well, the wealth advisory group said.