Africa has no shortage of wealthy, high-net-worth (HNW) individuals. According to the AfrAsia Bank Africa Wealth Report 2021, which was released in April 2021, total private wealth held across the continent amounted to around US$2 trillion at the end of 2020 and was expected to rise by 30% to US$2.6 trillion in the next nine years.
On a continent of such tremendous diversity, levels of development and varying types of political and economic risk, it is hardly surprising that this wealth is not evenly distributed. In fact, just five countries continue to account for more than 50% of this wealth: Egypt, Kenya, Morocco, Nigeria and South Africa.
Digging down further into these wealthy countries, and even more differentiation becomes evident. Mauritius, for instance, stands aloft as the richest country in Africa, with per capital income of around US$30 000 per person. Yet South Africa has double the number of millionaires than any other country on the continent, and Egypt leads the race when it comes to billionaires. A millionaire, as per the report, is defined as someone with wealth in excess of US$1 million and a billionaire as an individual with more than US$1 billion in assets.
Where Africa’s wealthy make their money
At a country-specific level, unpacking the sectors and businesses in which wealthy Africans made their money is as interesting as appreciating the role that family legacy and long-held wealth accumulation plays on the continent.
In January 2021 Forbes magazine, which is renowned for its rich list rankings, put HNW Africans under the spotlight and determined that the Nigeria’s Aliko Dangote retained the top spot for the 10th year in succession. Dangote’s wealth comes largely from cement, and in recent years salt and sugar manufacturing, as well as oil refineries.
Second on the list was Egypt’s Nassef Sawiris, who runs part of his family’s extensive business empire, a conglomerate that has tendrils into almost every sector of Egypt’s economy including construction, fertilizer production, cement and a variety of investment holdings.
In third came South Africa’s Nicky Oppenheimer, who sold his 40% stake in De Beers diamond company in 2012 to miner Anglo American for US$5.1 billion.
Another South African, Johann Rupert, takes fourth position. Rupert chairs Swiss luxury goods company Richemont, a spinoff from the Rembrandt Group which his father, Anton, founded in the 1940s. The luxury goods sector has been good to the Rupert family, as have other investment holdings.
Finally, Nigerian Mike Adenuga ranks fifth. Adenuga made his money in the telecoms sector and owns Nigeria’s third-largest operator, Globacom. He also has an oil exploration company, Conoil Producing Limited.
Drilling down to the sparkling sectors
Based on the Forbes ranking of 18 individuals, there is a heavy diversified focus among Africa’s leading billionaires, including the likes of Rupert and various members of the Mansour family of Egypt. Telecoms too is a notable sector linked to the success of Zimbabwean Strive Masiyiwa, Egypt’s Naguid Sawiris and Nigeria’s fifth-ranked Adenuga.
Other sectors which have helped to build these assets include cement production, construction, investment holdings, mining, oil, food (such as sugar), media and financial services.
While many would-be millionaires will likely continue to focus on these lucrative ‘backbone’ industries in the future, taking up the opportunities and the groundwork laid by the current billionaire base, it is also true that an emerging continent also boasts a number of new and exciting sectors. Thought leaders, academics and research reports, many of which are unpacking the potential for various sectors across Africa in the wake of Covid-19, have highlighted the likes of green energy solutions, such as solar power, and the development of agribusinesses as potential growth sectors across Africa. Retail and real estate development are also on the radar, as is the strengthening of homegrown African manufacturing.
It is also worth keeping an eye on developments in the healthcare sector, as well as online education. Digital services, app development, mobile payment solutions and internet access options – all of which are linked to the technology-enabled Fourth Industrial Revolution – will also continue to create space for innovative African solutions.
While opportunities will doubtless differ from country to country, the likes of African Leadership University president Christopher Williams believes: “In the wake of Covid-19, Africa has the chance to transform what much of the world sees as insurmountable challenges into monumental opportunities.” And, in the process, to open doors for new generation of millionaires and billionaires.