Most of them are based in Johannesburg, according to thelatest AfrAsia Bank New World Wealth Report, which found that the South African city tops the list of millionaire hotspots with 23,400 individuals holding net assets worth at least $1 million.
Cairo follows in second with 10,200, whilst the Nigerian megacity of Lagos has 9,100.
Meanwhile, Accra is expected to see a 78% rise in millionaires by 2025 — the highest increase anywhere in Africa.
With financial security assured, the question on the lips of many of these wealthy individuals is not “How much?” but “What can I do with it?” Bimpe Nkontchou, a Nigerian-born lawyer with over 25 years of experience, has made it her business to find out.
We sit down with Nkontchou, the managing principal of UK-based wealth management company W8 Advisory, to find out how Africa’s ultra-rich spend their millions.
What type of millionaire typically looks for wealth management advice?
Bimpe Nkontchou: A lot of my clients are Nigerian, although I have clients in East Africa and other parts of West Africa as well.
Many of my Nigerian clients have made their money from oil exploration and services. But I’ve found that in the last five to seven years there have been a lot more people who have made their money from financial services, as well as in telecommunications, the media and the film industries.
We’re seeing non-traditional sectors picking up pace and affording an opportunity for wealth creation.
How are they spending their money?
BN: I would say that more than half of their wealth stays on the continent; families typically think of home first of all, even buying land — something that, over generations, was always an important asset.
Real estate acquisition is definitely a popular service, whilst London real estate is an asset class in itself. London is a magnet for Africans and has been for some years. Many Africans have been educated here and England continues to be a destination for first-class international education.
Philanthropy is a growing area. I do give advice to clients finding a cause that the family can support. A lot of Africans realize there is a big need still for education on the continent and many are exploring giving back in the sector. Any wealthy African with a conscience and some intellect should realize that it’s about time that we step up ourselves and do as much for the continent as foreigners are doing.
More and more wealthy Africans are also realizing that in collecting African art they can hold on to part of their heritage, as well as patronize growing artists. We need to retain our heritage and the best way to do that is to try and make sure that the best African art — modern, contemporary and even old — is kept in the hands of Africans.
What is the main challenge when it comes to helping the ultra-rich?
Bimpe Nkontchou: I traveled once with a client, arriving at Heathrow Airport. He was obviously very wealthy and very self confident. We stood at immigration, myself behind him, when he was called up. They asked him how long he was going to be in the country, and he says “I don’t know, I haven’t thought about it.” The immigration officer says “you haven’t? So what do you do here?” And he says to the chap: “I don’t ‘do’. I own.” That rather put the officer in his place!
BN: Some clients are blissfully unaware that the wealth they’ve created could have a negative impact on the next generation.
The offspring of wealth creators grow up in a very comfortable and cosseted environment, and perhaps might lose that drive, the hunger that created the wealth in the first place. It’s challenging for families to create an entrepreneurial spirit within them.
The next generation can work in any country, live anywhere, and sometimes because some of these children have spent so long in the UK or the U.S. …they lose that contact — there’s quite a bit of nurturing to be done in ensuring that children feel some responsibility, not necessarily to work for the family business, but to contribute.