Research findings overview 12 August 2020
Page 2 A surprising and dynamic continent where challenges are met with creativity “Africa is seldom thought of as a place where wealth is created. In many global wealth studies, Africa is conspicuously absent from the analysis. When African wealth is discussed, it is often linked to the continent’s governance problems, with wealth accumulation cast as rent extraction rather than value creation.” - Dr Stuart Theobald, CFA and Dr Graunt Kruger, study leads
Page 3 Presentation overview 1. Background on methodology and key features of respondents 2. Findings: How wealth is created 3. Findings: How wealth is invested 4. Findings: Lifestyles and how wealth is spent 5. Findings: How wealth is bequeathed
Page 4 Key features of respondents Background For this study, 265 high-net worth Africans completed a comprehensive survey, of which 75 conducted a further in-depth interview. Where they were from: (number of survey respondents per country) The five countries covered in this study collectively 70 65 account for the majority of GDP in Sub-Saharan Africa 60 56 56 52 ($1,01-trillion, 58% of SSA 50 GDP) 36 40 They account for a 30 combined population of 20 327m, or 31% of the 10 population of Sub-Saharan 0 Africa Nigeria South Africa Kenya Ghana Mauritius
Page 5 Key features of respondents Background How old they were: (number of survey respondents in each age bucket) 35 30 30 28 27 Nigeria 26 26 25 South Africa Kenya 19 20 Ghana 18 Mauritius 14 14 15 13 10 8 8 7 7 6 4 4 4 5 1 1 0 0 0 0 0 0 18-25 26-35 36-50 51-64 65+
Page 6 Key features of respondents Background How much they were worth: (number of survey respondents in each wealth bucket) 50 45 45 Nigeria 41 40 40 South Africa Kenya 35 Ghana 30 Mauritius 26 24 25 18 20 16 15 10 10 8 8 4 4 4 5 3 3 3 2 2 2 0 0 $1m-$2m $5m-$20m $20m-$100m $100m+
Page 7 From a wide variety of industries Background Ranking of respondents’ industries per country. Respondents could choose more than one.
Page 8 Headline finding: African wealth is driven by Findings: Creation entrepreneurship Particularly in less developed markets, most respondents had made their money from entrepreneurship. Ghana Kenya Nigeria Mauritius South Africa
Page 9 Entrepreneurs work in various industries BUILD Findings: Creation Top four industries of entrepreneurs, per country Kenya Ghana Trade Real estate 16 16 Real estate Construction 12 9 Trade Retail 9 10 Construction Manufacturing 8 6 Nigeria Mauritius South Africa Financial services 5 Real estate 19 Real estate 6 Real estate 3 Oil & gas 13 Manufacturing 5 Mining 2 Construction 12 Media 2 Food & beverage 3 Trade 8 Technology 2 Construction 3
Page 10 The Side Hustle BUILD Findings: Creation 70% Often, entrepreneurship is a side activity of respondents who have Entrepreneurs who are also executives Executives who are also entrepreneurs 60% executive careers. That was 50% particularly true in Nigeria, Ghana and Kenya. 40% 30% 20% 10% 19% 64% 7% 43% 25% 19% 10% 50% 16% 10% 0% Nigeria Ghana Mauritius Kenya South Africa
Page 11 Factors for Success BUILD Findings: Creation Respondents were asked to rank five Ghana Timing factors from first to last in terms of Kenya Mauritius importance in their success. Ranks 4 Nigeria were then scored out of 5 and South Africa averaged for each country, as shown 3 in the spider diagram here. “Idea” Funding Team consistently ranked top, while 2 “funding” was often lowest. 1 Business model Idea
Page 12 How did you get to your first $1m ? How have you generated wealth Respondents change how since? they accumulate wealth Survey respondents had different approaches to wealth creation early in their careers compared to later. Here are the numbers in each category for their first million and subsequent wealth
Page 13 How Africans hold Findings: Preservation 5% their wealth 2% 18% South Africa 6% 11% 6% 51% 14% 4% 29% Property is important across the continent, Mauritius 4% 21% 9% 18% while equities account for more of respondents’ assets in South Africa 30% 5% 26% Ghana 9% 17% 4% 9% 33% 6% 23% Nigeria 7% 16% 5% 10% 25% 4% 38% Kenya 7% 20% 3% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Stocks or equities Bonds and other debt instruments Cash or bank deposits Alternative investment vehicles Tangible assets Lifestyle assets Investments in own business
Page 14 Fears about wealth Findings: Preservation Note: numbers indicate % of total respondents who selected option. More than one option could be selected. Question: What concerns, if any, do you have when it comes to preserving wealth? The political environment is the primary concern related to wealth preservation among respondents with nearly two-thirds listing it as a worry 90% 82% 79% 80% Nigeria Ghana Kenya South Africa Mauritius 68% 67% 70% 64% 61% 60% 58% 60% 55% 54% 48% 50% 46% 46% 45% 42% 41% 39% 38% 38% 37% 40% 37% 36% 36% 36% 36% 32% 30% 31% 29% 30% 25% 23% 21% 21% 20% 18% 20% 17% 17% 14% 13% 13% 11% 11% 11% 10% 8% 10% 0% Personal security and Succession and Stock market volatility Personal and family Tax on the wealthy Online security and Global economic Compliance issues Political environment safety inheritance issues health privacy changes
Page 15 Entrepreneurs vs Professionals Findings: Preservation 14% Across Africa, entrepreneurs Investments in my own business(es) 27% have more of their wealth tied Lifestyle assets (cars, collectables, art, 4% into their own business, while wine) 4% professionals diversify into stocks and equities Tangible assets (property, primary and 26% secondary residences, etc.) 26% Alternative investment vehicles (private 8% Executives/professionals equity, venture capital, hedge funds) Entrepreneurs 7% 17% Cash or bank deposits 16% 7% Bonds and other debt instruments 5% 24% Stocks or equities 14%
Page 16 Young vs Old Findings: Preservation Younger respondents were less concerned about the political environment but more worried about their personal security and safety than the older generation. They were also less bothered by stock market volatility and global economic changes.
Page 17 Tangible Assets Findings: Preservation Most respondents already own residential property, and second homes in all countries except South Africa. Most Kenyans and Nigerians also own farmland. Nigerians have the widest property interests. Ghana Nigeria Mauritius South Africa Kenya No interest . 6% 27% 6% 37% 43% Foreign property 63% 52% Interested in 51% 22% 39% 31% 21% 43% 41% 18% Currently own 25% 9% 15% 52% 80% Farmland 40% 13% 28% 22% 16% 35% 78% 57% 26% 4% 18% 4% 0% 48% 54% Commercial real estate 57% 47% 44% 10% 25% 24% 49% 56% 41% 21% 6% 0% 0% 9% 48% Residential real estate (rental or 40% 24% 25% 33% 12% investment) 54% 76% 75% 58% 40% 2% 2% 0% 15% 38% Residential property: secondary 18% 28% 14% 6% 9% home/s 80% 70% 86% 79% 53% 0% 0% 0% 3% 2% Residential property: primary home 4% 8% 2% 0% 0% 96% 92% 98% 97% 98%
Page 18 Work Time Findings: Lifestyle Typically, how many hours South Africa 12% 12% 20% 9% respondents spend working per week Less than 20 hours Nigeria 11% 52% 32% 20 to 40 hours 40 to 60 hours More than 60 hours Mauritius 11% 19% 47% 19% Kenya 13% 52% 30% Ghana 10% 21% 48% 19% 0% 20% 40% 60% 80% 100%
Page 19 Spending Time Findings: Lifestyle Respondents spent their time on many activities and were largely consistent in how they did so… Family Hobbies . South Africa 11% 23% 65% 4% 48% 27% 21% Nigeria 5% 11% 52% 9% 76% 9% 5% None Up to 5 hours Mauritius 11% 19% 47% 6% 79% 12% 3% Up to 10 hours More than 10 hours Kenya 5% 13% 52% 15% 69% 17% 0% Ghana 10% 21% 48% 20% 73% 6% 2% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Page 20 Spending Time Findings: Lifestyle …the one exception being “restorative time” which was more of a preoccupation outside South African and Mauritius Sport Restorative time (prayer, meditation, yoga) . South Africa 8% 54% 27% 10% 39% 56% 5% 0% Nigeria 16% 67% 15% 2% 0% 71% 18% 11% None Up to 5 hours Mauritius 17% 51% 29% 3% 27% 67% 7% 0% Up to 10 hours More than 10 hours Kenya 31% 56% 11% 2% 8% 55% 21% 17% Ghana 34% 60% 6% 0% 10% 45% 27% 18% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Page 21 Hobbies Findings: Lifestyle Africans are rather consistent in their favourite pastimes .
Page 22 A time for giving Findings: Bequeathing Respondents generally considered it important to leave wealth to heirs 80% 70% 60% 50% Extremely important Very important 40% Important Somewhat important 30% Not at all important 20% 10% 0% Ghana Kenya Mauritius Nigeria South Africa
Page 23 Family is the focus Findings: Bequeathing of bequeaths Family ranks highest for the proportion of respondents’ estates. Nigeria has the highest allocated to charity, at 18% How respondents from different countries plan to split their estates between family, charity and other beneficiaries
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