Mauritius home to Africa’s richest, Zimbabwe the poorest

Wealthy people can get automatic citizenship if they spend US$500 000 or more on a home in the country.

People living in Mauritius are the wealthiest individuals in Africa with US$21 700 in wealth per capita, while those in Zimbabwe are the poorest having only US$200 per person.

These are the findings of the 3rd annual Africa Wealth Report, with North African countries such as Algeria, Egypt and Morocco all ranking high on the list despite recent instability. 

Andrew Amoils, head of research at New World Wealth, says it should be noted that all these figures are well below top ranked worldwide countries such as Switzerland and Australia, which have wealth per capita’s of over US$200 000. 

Apart from Zimbabwe, all countries listed experienced a rise in per capita wealth during the period between 2000 and 2015.

Contributing factors to Zimbabwe’s poor performance include:

- The erosion of ownership rights in the country. Ownership rights are key to facilitating wealth creation. In Zimbabwe, business owners are unsure as to whether their businesses or property will still belong to them a year down the line, which creates a situation where no one will take the chance of investing in the country.

- Ongoing political intimidation and the fixing of elections in 2002, 2005, 2008 and 2013.

- The banning of the independent media in the early 2000s, which has created a situation where it is impossible for investors to tell what is happening there. Foreign journalists are also not allowed inside Zimbabwe. The only TV footage that comes out of Zimbabwe comes from state-owned TV stations.

Amoils says back in 2000, Zimbabwe was one of the wealthiest countries in Sub-Saharan Africa on a wealth per capita basis, ranked ahead of the likes of Nigeria, Kenya, Angola, Zambia and Ghana. However, now it is ranked well behind these countries.

Mauritius topped the list, with average wealth of US$21 700 per person. Contributing factors to its high average wealth include:

- Secure ownership rights.

- Migration: a large number of wealthy individuals have moved there over the past decade. Wealthy people can get automatic citizenship if they spend US$500 000 or more on a home in the country.

- Low taxes which encourage business formation and appeal to retirees. Company and personal income tax rates are only 15%, with no inheritance or capital gains tax.

- A thriving and growing financial services sector, particularly in offshore banking, fund management and private banking.

- Low level of government regulation in the business sector (when compared to nearby countries such as South Africa, which has exchange controls, high taxes, big trade unions and BEE hiring requirements).

- Lifestyle that appeals to wealthy retirees: beaches, weather and scenery.

- Low crime rate.