News Column

Locals richest in Africa, but gap is narrowing

January 8, 2014

The individual wealth of the average South African had increased to $11 310 (about R120 000) at the end of last year from $4 200 in 2000 on the back of stable asset ownership, a functional banking system and a free and independent media, Andrew Amoils , a senior analyst at New World Wealth, said yesterday. He was speaking after the company released its Wealth Statistics in Africa report, which suggests that the average South African remains the richest on the continent, although growth in wealth has been slower than in several other African countries. Ethiopians remain the poorest with assets of $260 a person last year, while Angolans have grown their wealth fastest. New World Wealth is a research company providing information on the global high-net-worth sector, with a special focus on Africa , Asia and the Middle East . The study analyses the wealth trends of individuals in 19 African countries between 2000 and 2013. It uses official countrywide income distribution statistics to determine the average wealth of individuals by country. This includes people's assets, investments and equities, but excludes the value of their primary residence. Amoils said the figures for all African countries were well below the global average of $27 600. In the Brics bloc of Brazil , Russia , India , China and South Africa , South Africans are ahead of Indians, whose average wealth is less than $2 000, while the individual wealth of Brazilians and Chinese stood at $20 000 and $14 000, respectively. Amoils said the growth in South Africans' individual wealth came off a high base and could be attributed to higher gross domestic product (GDP) per capita than countries elsewhere on the continent, a well functioning banking system and stable asset ownership rights. "The right to own anything in South Africa is firm and this gives investors confidence and a will to buy anything from property to other assets in the country without worrying about ownership," he said. Proper banking systems boosted investors' confidence in the country and also promoted the circulation of cash. Total individual wealth in South Africa totalled $571.2 billion last year. In 2000, Zimbabwe was in the middle of the rankings on a wealth per capita basis but it was the worst performer over the period ending last year, with a decline of 10 percent. " Zimbabwe's poor performance could be attributed to erosion of ownership rights, which has led to a significant loss of currency and hyper-inflation," Amoils said. In addition, the banning of independent media in the early 2000s "has created a situation where it is impossible for investors to tell what is happening in the country". Zimbabwe's wealth per person is now $570 , down from $630 in 2000. In contrast, Angolans grew their wealth from $620 to $3 890 over the period. In terms of growth in GDP per capita, Angola topped the list with a 737 percent gain to $5 485 between 2000 and 2012, followed by Ghana . In individual wealth, Namibia's growth was second to Angola's . However, economic growth does not necessarily translate into individual wealth. "If one looks at countries like Ghana and others which have experienced good economic growth, personal wealth is owned by few individuals and has not filtered through to the rest," Amoils said. It took a while for rapid economic growth to filter through to ordinary citizens and this was the case in most African countries, he noted. Pretoria News


Source: Pretoria News (South Africa)

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