African Nations Top List of High-Net-Worth Growth
Maitland Fiduciary Services, South Africa
With its immense natural resources, young population and support from China, Africa is expected to create wealth at a record pace for the next few decades.
Nigeria will see its population of high-net-worth individuals grow faster than any other country on the planet, according to a recent Wealth X report. Over the next five years, Wealth X researchers estimate the number of millionaires in the country will expand at an annual rate of 16.4%.
Egypt will see its high-net-worth population expand by 12.5% annually over the same period, making it the second fastest growing country on the Wealth X list. The list also includes Kenya in seventh place.
With the rise in income and wealth comes the growing demand for professional asset management and consulting services.
PriceWaterhouseCoopers estimates that the amount of assets under management in 12 key African countries will triple to $1.1 trillion by 2020. This exclusive club of countries drives much of the region’s growth. It includes Egypt, Nigeria, Kenya and, most importantly, South Africa.
In fact, Johannesburg is already the center for more than half of Africa’s professional wealth management industry. According to New World Wealth’s AfrAsia Bank Africa Wealth Report 2018, the city is home to $82 billion of Africa’s total $140 billion in high-net-worth wealth.
This fact seems to have caught the attention of the multinational multi-family office Maitland Group, which recently acquired Johannesburg-based Talaria Wealth and expanded its operations across the country. “South Africa is certainly seen as a gateway to the African continent,” says Cheryl Howard, Talaria’s former owner who now serves as the managing director of Maitland in South Africa. “We’ve seen a growing demand for offshore and multi-jurisdiction private equity investments.”
Howard firmly believes that South Africa provides the perfect balance of regulations, political stability and talent to act as the gateway to Africa. However, the volatility of the South African rand and the growing pains of being an emerging market have an impact on the country’s ability to generate wealth. She points to the country’s capital controls (citizens have a 1 million rand foreign capital allowance) as a fundamental challenge for affluent investors and entrepreneurs.
Coupled with the ongoing trade war and the slowing Chinese economy, Howard sees the rate of wealth creation across the globe slowing in the near term.
Nevertheless, there’s growing demand for family offices in the region as families take on the tasks that were traditionally managed by accounting and legal firms. “The region need a multinational approach,” says Howard. “With all the regulations around capital controls, anti-money laundering, and compliance requirements across different jurisdictions, ultra-wealthy families need a combined service offering coupled with a global network.”