Millionaires flooding out of South Africa

[Nat Quinn]

Thousands of millionaires are fleeing South Africa as the country’s basic infrastructure deteriorates and its economy stagnates.

This was revealed in the latest BRICS Wealth Report for 2023 by Henley & Partners.

The report showed that South Africa has lost thousands of millionaires over the last ten years – ranking near the bottom of the BRICS+ countries.

Since 2013, South Africans have seen their wealth decline by 20%, compared to rapid growth for emerging market peers such as China and India, whose wealth grew by 92% and 85% respectively.

This means South Africa has lost approximately 9,350 dollar millionaires over the past ten years.

South Africa is now home to 37,400 millionaires, 102 centi-millionaires and 5 billionaires, measured in US dollars.

High-net-worth individuals (HNWIs) tend to leave a country due to social, political, and economic instability. They prefer “safe haven countries” where their wealth can be protected easily.

In South Africa, HNWIs are particularly concerned about their personal security and safety due to the rising crime rate and violence.

Growing concerns around education and healthcare are also factors in rich people wanting to leave the country.

However, the future looks somewhat brighter for South Africa in terms of wealth, with Henley & Partners expecting the country’s wealth to grow by 60% over the next decade.

Due to its affordability, the country will also begin attracting foreign millionaires and billionaires.

In particular, Cape Town is expected to see an influx of HNWIs, with its current 7,400 millionaire population set to swell by 85% over the next ten years to 13,500 in 2033.

RMB Morgan Stanley recently said South Africa is a standout among its global peers by offering an unexpected advantage in terms of affordability.

The rand has weakened about 9% versus the dollar and euro and some 12% against the British pound over the last year.

This depreciation and South Africa’s fairly subdued inflation compared to other countries means relative prices for local goods and services on sale are cheaper than elsewhere.

“Consumers can drink nearly three cappuccinos in South Africa for the price of one in the US and could spend four nights in a Cape Town hotel for the price of only one in London,” said Mary Curtis, a strategist at the broker and Andrea Masia, an economist.

“Looking at the bigger picture, low relative prices of South African goods and services are just another example of the value in South African assets.”

 

SORCE:Millionaires flooding out of South Africa – Daily Investor

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