Africa’s Rich Set to Get Wealthier From Technology Boost

The first generation emerged following the oil boom and liberalization of economies, with most investing in heavy industries, trading and commercial farming, according to Faizal Bhana, the director for the Middle East, Africa and India at state-funded Jersey Finance. 

They became entrepreneurs in their twenties or in teenage years and are now in their sixties and seventies, compared with their successors who are at least in their thirties, Bhana said in an interview. 

“There’ll be a boom of ultra high net worth individuals in Africa over the next five to 10 years,” he said. “They’re still farming, they’re still doing infrastructure projects, but increasingly using technology.” 

The wealth transfer is to a generation of global citizens that are more educated and tech savvy, while the founders are keen to retain some level of control, Bhana said. There’s also a new generation of tech and fintech entrepreneurs, especially in Nigeria, Kenya and South Africa, he said. 

“The impact that technology is having on the African continent is unprecedented. And as a result of that, what I would expect is that there will be a lot more entrepreneurs,” Bhana said.

In the early days of the coronavirus pandemic, the founders were hardest hit due to advanced age, which resulted in increased focus on succession planning and governance structures to ensure business continuity and wealth preservation, he said. 

Private wealth in Africa is estimated at $2.1 trillion and is expected to increase 38% in the next decade, according to the Africa Wealth Report 2022 published in April. Half of the wealth is in five nations: South Africa, Egypt, Nigeria, Morocco, and Kenya. Africa currently has 136,000 high net worth individuals, or people worth $1 million and more, it said. 

Source: Bloomberg Business News