About 62 000 South Africans are in the top 1 percent of global wealth holders and 43 000 are dollar millionaires, according to Credit Suisse’s fourth annual wealth report, released yesterday. The numbers are slightly down due to a 15 percent fall in the rand against the dollar this year.
Unusually for a developing country, 71 percent of household wealth in South Africa was made up of financial assets, Credit Suisse reported. “This reflects a vigorous stock market and sophisticated life insurance and pension industries, which are key aspects of the strong modern sector of the economy.”
Wealth in Africa rose but only by 1.2 percent, to $27 trillion (R269 trillion). And wealth per adult has fallen 1.5 percent, to just below $5 000.
Aggregate global wealth passed the pre-crisis peak in 2010 and has set new highs every year, according to the report. But, while average wealth is at a new peak of $51 600 per adult, inequality remains high. The top 10 percent of the world population owns 86 percent of global wealth while the bottom half of all adults owns barely 1 percent.
The richest nations, with wealth per adult over $100 000, are found in North America, western Europe and among the rich Asia-Pacific and Middle Eastern countries. These are headed by Switzerland, which achieved a peak value of $513 000 per adult. Australia ($403 000), Norway ($380 000) and Luxembourg ($315 000) all experienced an increase in wealth per adult and retained their respective second, third and fourth places from 2012. The US, Sweden, France, Singapore, Belgium and Denmark are close behind, with average wealth per adult in the $250 000 to $300 000 range. Japan was demoted from fourth place last year and no longer ranks among the top 10 countries.
Total household wealth globally has risen nearly 5 percent to $241 trillion this year, mostly due to the US, which posted its fifth successive annual gain. But the figure was boosted surprisingly by a resurgence of wealth in the crippled euro zone – despite the six-quarter recession and continuing low growth.
The strongest growth was in North America, where wealth grew 11.9 percent from last year, followed by Europe at 7.7 percent. Asia Pacific saw a decline of 3.7 percent, largely due to Japan. As the dollar value of the yen declined, total household wealth in the third-largest economy fell by $5.8 trillion, equivalent to 20 percent of Japan’s net worth.
Credit Suisse noted that between 2000 and 2013, emerging markets nearly doubled their share of global wealth from 12 percent to 21 percent.
“We expect the pace of wealth generation in emerging markets will continue to be greater than developed markets, although this difference will be less striking in the next five years.
“The share of wealth of emerging markets will likely reach 23 percent by 2018, an increase of 0.5 percentage points on average each year. The annual rate of increase is projected to be 9.1 percent for emerging markets against 6.1 percent for developed markets.”