HARARE – Zimbabweans have been ranked among Africa’s poorest citizens, with an average wealth of $200 per person, a survey by AfrAsia Bank (AfrAsia) has revealed.
According to the study — Africa Wealth Report 2017 — Mauritius has the wealthiest individuals with an average wealth of $25 700 per person while, interestingly, North African nations such as Algeria, Egypt and Morocco rank high on the list, despite recent instability.
In the report, AfrAsia — a Mauritius-domiciled financial institution which once operated in Zimbabwe after acquiring the now-defunct Kingdom Financial Holdings Limited — noted that back in 2000, Zimbabwe was one of the wealthiest countries in sub-Saharan Africa on a wealth per capita basis.
Back then, the 13 million-plus populated country ranked ahead of the likes of Nigeria, Kenya, Angola, Zambia and Ghana.
But the country — once the continent’s bread basket — has deteriorated due to a deepening socio-economic and political crisis.
Lack of respect for the rule of law, poor ownership rights and brain drain, among other problems, have also dealt a major blow to Zimbabwe’s prospects.
“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,” AfrAsia said, adding that “ownership rights are key to facilitating wealth creation”.
“On-going political intimidation and the alleged 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,” the financial institution said.
“Around 20 percent of Zimbabweans have fled the country since 2000, taking their remaining wealth with them. This has also led to a brain drain,” it said in the report, a result of New World Wealth’s extensive research covering Africa’s wealth market.
The report provides a comprehensive review of the wealth sector on the continent, including millionaire trends, luxury trends and wealth management trends from 2006 to 2016, with projections to 2026.
It also noted that a large portion of the Gross Domestic Product (GDP) flows into African governments has little impact on private wealth creation.
On the other hand, it ranked Zimbabwe’s neighbour, South Africa (SA), as having cities more attractive to the wealthy, with a large number of mega-rich individuals having migrated there over the past decade, especially from France and southern Africa.
“We estimate that 280 millionaires have moved there since 2006,” AfrAsia said, further stating that the country’s “thriving and growing financial services sector, particularly in offshore banking, fund management and private banking . . . automatic permanent residency if one buys a US$500 000+ home in the country . . . encourage wealthy people to move there”.