With 39 300 millionaires in the country, South Africa ranks 28th in the world for the number of millionaires in a country.
According to the 2022 Africa Wealth Report, published by Henley & Partners in partnership with New World Wealth, there are 9 factors that contribute to private wealth growth in a country.
Even though South Africa has shown some significant decline in the rankings, it is still ahead of some major economies such as Turkey, Argentina, Malaysia and Thailand.
Private wealth growth will take flourish under these conditions, says the report:
Safety and security
The level of safety and security in a country as well as how efficient the local police in country are, are the important factors in encouraging long-term wealth growth for any country.
Media freedom or the neutrality and objectivity of major news outlets in a country also play a part driving long-term wealth. A well-developed financial media is also critical for the distribution of information to investors.
Robust ownership rights
For this factor, the report used the following case study:
Zimbabwe is a case study of the consequences of taking away the legal ownership rights of individuals—once assets are taken they tend to lose their value because potential purchasers won’t risk buying and/or investing in goods.
Strong economic growth
The wealth growth of any individual is linked with a country’s economic growth.
Banking system and stock market
A banking system and stock market that is well-developed ensures that people can invest their finances and grow their wealth.
The intervention of government in the business sector can create inefficiencies within an economy which can further impact wealth growth.
Low income tax and company tax rates
A country’s low tax rate can lead to wealth growth. Dubai and Singapore are examples of the power that tax rates can have in encouraging business creation.
Investment barriers such as restrictions on the movement of currency between two countries can discourage wealth growth.
The migration of high net worth individuals (HNWIs) to a country helps build wealth while the HNWI migration from a country slows down the creation of wealth. HNWIs refers to people that have a wealth of $1 million (R16.25 million) or more.