Nigeria, Africa’s biggest economy, is expected to see the exit of 300 dollar millionaires this year; up from 200 in 2022, according to the 2023 edition of Henley Private Wealth Migration Report.
This will make the country the second-biggest loser of millionaires on the continent after South Africa, which is expected to see a net outflow of 500 millionaires, according to the report, which tracks wealth and investment migration trends worldwide.
Dollar millionaires or high-net-worth individuals (HNWIs) refer to individuals with investable wealth of one million dollars or more.
The migration figures focus only on HNWIs who have moved and stay in their new country more than six months a year, according to the report.
“Most incoming millionaires going to the UAE come from India, with large numbers also coming from the UK, Russia, Lebanon, Pakistan, Turkey, Egypt, South Africa, Nigeria, Hong Kong, and China,” the report said.
It said a net inflow of approximately 4,500 millionaires is expected in the United Arab Emirates (UAE) this year — one of the highest on record. “Pre-pandemic, the UAE traditionally saw net inflows of around 1,000 high-net-worths per year,” it added.
A breakdown of the report shows that the number of millionaires expected to leave Egypt, Ghana and Kenya remain unchanged from last year’s figures at 200, 100 and 100, respectively.
According to Andrew Amoils, head of Research at New World Wealth, millionaire migration figures can be a telling real-time barometer for the health of an economy as wealthy people are extremely mobile and they therefore tend to be the first to move when the need arises.
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“The countries that consistently attract affluent families through migration tend to be economically robust and usually have low crime rates and offer attractive business opportunities,” he said.
The Henley report also revealed that China will record the biggest net outflow of millionaires (13,500) globally this year, followed by India with an exodus of 6,500.
The United Kingdom (3,200) and Russia (3000) sit third and fourth place respectively.
Brazil (1,200), Hong Kong (SAR China) (1,000), South Korea (800), Mexico (700), South Africa (500), and Japan (300) make up the rest of the top 10 biggest millionaire losers forecast for 2023.
There’s been a steady growth in millionaire migration over the past decade, with global figures for 2023 and 2024 expected to be 122,000 and 128,000, respectively, according to Juerg Steffen, CEO at Henley & Partners.
“In general, wealth migration trends look set to revert to pre-pandemic patterns this year, with Australia reclaiming the top spot for net inflows as it did for five years prior to the COVID-19 outbreak, and China seeing the biggest net outflows as it has each year for the past decade,” he said.
He added that the notable exceptions are former top wealth magnets, the UK and the US.
BusinessDay had reported in April that the number of dollar millionaires in Nigeria shrunk by 30 percent in the last decade due to naira depreciation and other economic headwinds.
The country recorded the largest decline in private wealth in Africa, according to the Henley report.
“Most wealthy Nigerians have their businesses in the country, which means their wealth is in naira,” Temitope Omosuyi, investment strategy manager at Afrinvest Limited, said. “So, as a result of the depreciation of the currency due to complexities in the foreign exchange and the policy around it, their wealth is worse off.”
Omosuyi added that the recent global economic challenges have also affected companies that are not globally competitive, particularly the ones that are not in the technological space.
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 on the official market. It depreciated to 740/$1 from N159/$1 on the parallel market.
The foreign exchange liquidity challenge is also a major contributing factor to the country’s inflation rate, which hit 22.22 percent in April 2023, the highest in 17 years, from 12 percent in December 2012, according to the National Bureau of Statistics.