Research findings overview 12 August 2020 Page 2 A surprising and - - PowerPoint PPT Presentation
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
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“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.”
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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) 56 65 56 52 36
Nigeria South Africa Kenya Ghana Mauritius 10 20 30 40 50 60 70
The five countries covered in this study collectively account for the majority of GDP in Sub-Saharan Africa ($1,01-trillion, 58% of SSA GDP) They account for a combined population of 327m, or 31% of the population of Sub-Saharan Africa
Background
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How old they were: (number of survey respondents in each age bucket)
1 4 26 19 6 7 28 30 7 27 18 4 8 26 14 4 1 14 13 8 18-25 26-35 36-50 51-64 65+ 5 10 15 20 25 30 35 Nigeria South Africa Kenya Ghana Mauritius
Background
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How much they were worth: (number of survey respondents in each wealth bucket)
41 10 3 2 45 16 2 2 26 4 8 18 40 4 4 3 24 8 3 $1m-$2m $5m-$20m $20m-$100m $100m+ 5 10 15 20 25 30 35 40 45 50 Nigeria South Africa Kenya Ghana Mauritius
Background
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Ranking of respondents’ industries per country. Respondents could choose more than one.
Background
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Particularly in less developed markets, most respondents had made their money from entrepreneurship. Ghana Kenya Nigeria Mauritius South Africa
Findings: Creation
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Top four industries of entrepreneurs, per country
3 3 5 6 Construction Food & beverage Manufacturing Real estate 2 2 2 3 5 Technology Media Mining Real estate Financial services 8 12 13 19 Trade Construction Oil & gas Real estate 6 10 12 16 Manufacturing Trade Construction Real estate 8 9 9 16 Construction Retail Real estate Trade
Ghana Kenya Nigeria Mauritius South Africa BUILD Findings: Creation
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Often, entrepreneurship is a side activity of respondents who have executive careers. That was particularly true in Nigeria, Ghana and Kenya.
19% 7% 25% 10% 16% 64% 43% 19% 50% 10% Nigeria Ghana Mauritius Kenya South Africa 0% 10% 20% 30% 40% 50% 60% 70% Entrepreneurs who are also executives Executives who are also entrepreneurs
BUILD Findings: Creation
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Respondents were asked to rank five factors from first to last in terms of importance in their success. Ranks were then scored out of 5 and averaged for each country, as shown in the spider diagram here. “Idea” consistently ranked top, while “funding” was often lowest.
1 2 3 4 Timing Team Idea Business model Funding Ghana Kenya Mauritius Nigeria South Africa
BUILD Findings: Creation
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How did you get to your first $1m ? How have you generated wealth since?
Survey respondents had different approaches to wealth creation early in their careers compared to
their first million and subsequent wealth
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Property is important across the continent, while equities account for more of respondents’ assets in South Africa
4% 10% 9% 18% 51% 3% 5% 4% 9% 6% 20% 16% 17% 21% 11% 7% 7% 9% 4% 6% 38% 23% 26% 29% 18% 4% 6% 5% 4% 2% 25% 33% 30% 14% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Kenya Nigeria Ghana Mauritius South Africa Stocks or equities Bonds and other debt instruments Cash or bank deposits Alternative investment vehicles Tangible assets Lifestyle assets Investments in own business
Findings: Preservation
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The political environment is the primary concern related to wealth preservation among respondents with nearly two-thirds listing it as a worry
79% 45% 41% 30% 36% 20% 54% 21% 64% 58% 38% 21% 46% 13% 29% 37% 10% 67% 61% 38% 18% 39% 36% 11% 13% 25% 55% 48% 37% 68% 32% 60% 23% 46% 11% 82% 36% 17% 11% 42% 17% 14% 36% 8% 31% Personal security and safety Succession and inheritance issues Stock market volatility Personal and family health Tax on the wealthy Online security and privacy Global economic changes Compliance issues Political environment 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Nigeria Ghana Kenya South Africa Mauritius 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?
Findings: Preservation
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Across Africa, entrepreneurs have more of their wealth tied into their own business, while professionals diversify into stocks and equities
14% 5% 16% 7% 26% 4% 27% 24% 7% 17% 8% 26% 4% 14%
Stocks or equities Bonds and other debt instruments Cash or bank deposits Alternative investment vehicles (private equity, venture capital, hedge funds) Tangible assets (property, primary and secondary residences, etc.) Lifestyle assets (cars, collectables, art, wine) Investments in my own business(es)
Executives/professionals Entrepreneurs
Findings: Preservation
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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.
Findings: Preservation
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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
96% 80% 54% 24% 35% 31% 4% 18% 40% 57% 40% 63% 0% 2% 6% 18% 25% 6%
Residential property: primary home Residential property: secondary home/s Residential real estate (rental or investment) Commercial real estate Farmland Foreign property
98% 86% 75% 56% 57% 43% 2% 14% 25% 44% 28% 51% 0% 0% 0% 0% 15% 6% 97% 79% 58% 41% 26% 41% 0% 6% 33% 10% 22% 22% 3% 15% 9% 48% 52% 37% 98% 53% 40% 21% 4% 18% 0% 9% 12% 25% 16% 39% 2% 38% 48% 54% 80% 43% 92% 70% 76% 49% 78% 21% 8% 28% 24% 47% 13% 52% 0% 2% 0% 4% 9% 27%
Findings: Preservation
No interest Interested in Currently own
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Typically, how many hours respondents spend working per week
10% 11% 12% 21% 13% 19% 11% 12% 48% 52% 47% 52% 20% 19% 30% 19% 32% 9% Ghana Kenya Mauritius Nigeria South Africa 0% 20% 40% 60% 80% 100% Less than 20 hours 20 to 40 hours 40 to 60 hours More than 60 hours
Findings: Lifestyle
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Respondents spent their time on many activities and were largely consistent in how they did so… .
Family Hobbies
20% 15% 6% 9% 4% 73% 69% 79% 76% 48% 6% 17% 12% 9% 27% 2% 0% 3% 5% 21% 0% 20% 40% 60% 80% 100% 10% 5% 11% 5% 11% 21% 13% 19% 11% 23% 48% 52% 47% 52% 65% Ghana Kenya Mauritius Nigeria South Africa 0% 20% 40% 60% 80% 100% None Up to 5 hours Up to 10 hours More than 10 hours
Findings: Lifestyle
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…the one exception being “restorative time” which was more of a preoccupation outside South African and Mauritius .
34% 31% 17% 16% 8% 60% 56% 51% 67% 54% 6% 11% 29% 15% 27% 0% 2% 3% 2% 10% Ghana Kenya Mauritius Nigeria South Africa 0% 20% 40% 60% 80% 100% None Up to 5 hours Up to 10 hours More than 10 hours
Sport Restorative time (prayer, meditation, yoga)
10% 8% 27% 0% 39% 45% 55% 67% 71% 56% 27% 21% 7% 18% 5% 18% 17% 0% 11% 0% 0% 20% 40% 60% 80% 100%
Findings: Lifestyle
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Africans are rather consistent in their favourite pastimes .
Findings: Lifestyle
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Respondents generally considered it important to leave wealth to heirs
Ghana Kenya Mauritius Nigeria South Africa 0% 10% 20% 30% 40% 50% 60% 70% 80% Extremely important Very important Important Somewhat important Not at all important
Findings: Bequeathing
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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
Findings: Bequeathing
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Respondents indicated many ways they contributed back to
here shows the percent
indicated they give back in the ways indicated.
54% 64% 58% 68% 86% 31% 57% 58% 32% 35% 79% 68% 47% 68% 15%
Ghana Kenya Mauritius Nigeria South Africa
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Give financially to nonprofit organisations Have my own or family foundation or charity Volunteer time, skills and services to nonprofits Give to university or school endowments Serve on the board of a nonprofit
Work for a nonprofit organisation Own a company creating jobs and
Invest in companies that support positive social, environmental policies and practices Social entrepreneurship: own a company to address social or environmental solutions I don't currently undertake any philanthropic activities
Findings: Bequeathing
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