Economic headwind reduces Nigerian millionaires by 4.6%

A mix of failed regulatory finance policies and underinvestment in relevant infrastructure have seen the number of millionaires or high net worth individuals (HNWIs) in Nigeria decline from 16,686 in 2014 to 15,850 in 2015, representing a 4.6 percent decrease, according to the latest report released by WealthInsight.

Oliver Williams, head of WealthInsight, noted that quite a number of people in the HNWI population had witnessed a shortfall in their net worth as their wealth was inextricably tied to the oil price.

“It is not just the Nigeria economy that failed to diversify away from oil during the boom years prior to 2014. Much of the private wealth in Nigeria was also heavily invested in oil before the price started to spiral,” said Williams.

In 2016, according to the report, about 836 Nigeria exited the millionaires’ circle having seen their net worth fall below the $1 million thresholds in the last year. Moreover, the majority of Nigeria’s HNWI population have witnessed a decrease in their wealth as the average wealth per millionaire dropped by $0.6 million from $7 million per HNWI in 2014 to $6.4 million in 2015.

Nevertheless, states like Lagos have seen an increase of 9.5 percent in its millionaires population, bringing the total to 7,366, equal to 46.5 percent of the country’s total HNWI population. The state is expected to witness further 10.6 percent increase in its HNWI population.

Williams noted that one reason alone will not be enough to explain the decline, “Simply condemning Nigeria’s largest export would ignore a host of other woes haemorrhaging is economy. A combination of some fairly unorthodox central banking policy has thrown Nigeria’s currency, the Naira, into disarray, meanwhile infrastructure underinvestment has left the country with an electricity output no larger than Edinburgh’s.

“Corruption has not only mocked the nation’s rule of law, but it also deters any would-be foreign investor from funding some of the many diverse and enterprising businesses in the country,” said Williams.

Although the HNWI population is forecast to grow by 10 percent, reaching 17,804 in 2020 and HNWI wealth is projected to grow by 26.1 percent to reach USD131.6 billion, the average wealth will stay under 2015 levels at USD6.5 million per HNWI.

The WealthInsight Intelligence Center Database is an information resource on the world’s HNWI and wealth sector. It is compiled and curated by a team of research specialists leveraging on over 125,000 dossiers of HNWIs from around the world.

FRANK ELEANYA