• Wednesday, February 28, 2024
businessday logo


Millionaire growth in smaller African peers holds lessons for Nigeria

Dollar nears N2,000 on black market as scarcity worsens

While the number of dollar millionaires in Mauritius, Rwanda, Uganda and Namibia grew in the last decade, it declined in Nigeria, Africa’s biggest economy.

The four smaller African countries are also projected to produce more millionaires in the next 10 years, challenging the ‘big five” wealth markets on the continent — South Africa, Egypt, Nigeria, Kenya, and Morocco –which have experienced declines in the number of millionaires over the past decade, according to the Africa Wealth Report 2023 by Henley and Partners, a London investment migration consultancy.

“The big five wealth markets in Africa together account for 56 percent of Africa’s high-net-worth individuals and over 90 percent of the continent’s billionaires,” it said.

It, however, said that their continued dominance is far from assured, and they could soon be challenged by the likes of Mauritius and Rwanda, which are fast gaining ground. “Namibia’s new residence by investment offering positions it as a future potential rival as well.”

Some of the factors that make these countries fast-growing markets for millionaires are safety and security, low taxes rates, ease of doing business, stability, good investment climate and access to foreign exchange markets.

“All these are ease of doing business policies. Once you have a supportive and collaborative business environment both from the economic and security perspective, it helps to attract investments in those countries. This is why those countries are seeing an increase in the growth of millionaires,” Damilola Adewale, a Lagos-based economic analyst, said.

He said there are different bottlenecks affecting private-sector players in Nigeria.

In the Africa Wealth Report, the country recorded a decline of 30 percent in the number of dollar millionaires from 2012 to 2022 on the back of naira depreciation and other economic headwinds.

It also saw the largest decline in private wealth compared to other countries that also recorded declines which are Angola (28 percent), Algeria (26 percent), Egypt (25 percent), South Africa (21 percent) and Botswana (10 percent).

“Despite the complex conditions surrounding a decrease in the total wealth pool in Africa, the economies of South Africa, Egypt and Nigeria have recorded negative growth amongst others due to the depreciation of some currencies against the dollar,” Thierry Vallet, interim chief executive officer at AfrAsia Bank, said.

Two economic recessions in the last seven years have weakened Nigeria’s foreign inflows, resulting in a liquidity challenge in the country’s FX market. Last year, the naira depreciated against the dollar, dropping to as low as 448/$1 from 157/$1 in 2012 at the official market. It depreciated to 740/$1 from N159/$1 at the parallel market.

The FX liquidity challenge is also a major contributing factor to the country’s inflation rate, which hit 21.34 percent in December 2022, the highest in 17 years, from 12 percent in the same period of 2012, according to the National Bureau of Statistics.

“The exchange rate slide and high inflation rate are not unexpected since to maintain the millionaire club, asset growth has to match or outperform both inflation and exchange rate,” Yemi Kale, chief economist and head of research at KPMG Nigeria, said.

Foreign investments into Africa’s most populous nation fell to the lowest in six years to N5.4 billion in 2022, according to the National Bureau of Statistics.

Read also: JPMorgan: the bank that never lets a crisis go to waste

Taiwo Oyedele, West Africa tax leader at PwC Nigeria, said Nigeria has lost its lustre as a choice destination for investment.

“If we fail to address the challenges and growing concerns of businesses, especially those that are within our immediate control to solve like unbearable tax burden and investment unfriendly FX regime, this is the outcome we will get – investors will simply vote with their monies as to the choice of where to invest,” he said.

Oyedele added that the country should start engaging and listening to investors, address their concerns to the extent possible, introduce business-friendly policies and watch billions of investments flow into the country.

Why are Rwanda, Mauritius, Uganda and Namibia growing private wealth?


Mauritius, one of the smallest countries in Africa, with a population of over 1.2 million is among the wealthiest economies in the continent. The number of resident millionaires grew by almost 70 percent over the past decade. The World Bank officially classified the country as a high-income country in 2020.

“Mauritius is known for its pleasant tropical climate, multiculturalism, and spectacular living environments, but its dynamic economy, attractive tax regimes, and competitive business landscape has bolstered the country’s global stature and is attracting high-net-worth individuals and families from around the globe,” analysts at Henley and Partners said.

They said for those who wish to reside in the island nation, the Mauritius Residence by Investment Program is the most efficient way to acquire such status. “Under this program, individuals who invest in the nation’s real estate market can become Mauritian residents within six to eight months.”

Aside from these, the country’s fast-growing financial services sector and the stock market as a result of the country’s strong democracy and political stability and low taxes (no estate duty or capital gains tax), which encourage business formation and appeal to retirees, increase private wealth in the country.

“A large number of wealthy individuals have moved to Mauritius over the past decade. In addition, many locally born millionaires have been created as the economy has grown,” the report said.

The country’s conducive business ranks it top in Africa and 13th globally in the 2020 World Bank Ease of Doing Business. It also ranks as the safest country in Africa and among the 20 safest countries on earth, according to the 2022 New World Wealth’s in-house safety index.


This East African country was the top-performing market in Africa during the 10-year period, with millionaire growth of 72 percent, followed by Mauritius.

Rwanda, one of the fastest-growing economies with a population of over 13 million, has undergone rapid industrialisation as its government invested time and resources into soft and hard infrastructure in order to attract foreign direct investment.

“Rwanda is promoting a very good investment climate. With all these factors, I am of the view that Rwanda, indeed, is emerging and they are gradually taking the bragging rights from Ghana being the gateway to the sub-region,” Daniel Anim, director of research and economic analysis at Business and Financial Times, Ghana, said.

The country also emerges among the leading countries globally, because of its investment, political climate and policies on doing business. It ranked second in Africa and 38th globally in the ease of doing business.


In Uganda, which recorded millionaire growth of 45 percent, is known for having one of East Africa’s most developed finance industries.

According to recent research by the Official Monetary and Financial Institutions Forum and Absa Bank, the country may in a few years become the financial centre of East Africa.

“It has made significant advancements in five key areas such as access to the FX market, transparency in taxation and regulatory regime, the ability of local investors, the state of the macroeconomic environment, and transparency in the enforcement of legal contracts,” it said.

It added that Uganda outperforms its regional neighbours in terms of market accessibility, openness, and transparency, followed by Kenya, Tanzania, Rwanda, and the Democratic Republic of the Congo.


The number of dollar millionaires in Namibia rose by 20 percent in the last decade and it is projected to grow by 60 percent in the next decade thanks to its low population density, an attractive tax system, a resilient, well-run banking system and a thriving eco-tourism industry.

“Namibia offers a conducive business environment anchored by advanced financial systems and a sophisticated banking sector, a strong macroeconomic framework, globally competitive infrastructure, and good governance, as well as a young, educated, and trainable workforce,” said Catherine Shipushu, senior manager, marketing, branding and communications at Namibia Investment Promotion and Development Board.

“The country’s strategic location and world-class port make it an ideal gateway to over 300 million people in other African markets. Furthermore, it boasts a strong legal system that protects the rights of investors in that disputes can be settled through the courts or international arbitration,” she said.

Just like Mauritius, Namibia is also using investment migration programmes to attract high-net-worth individuals to the country.

The programme, which is called Residence by Investment Offering, was launched in February. Experts say the programme is an innovative financing tool and has the potential to transform economies by injecting essential foreign capital and encouraging sustainable economic growth.

The main target of the programme, at least in its pilot edition, is to attract foreign investors from nearby South Africa, one of the continent’s biggest economies, according to Henley and Partners.