Numbers of US dollar millionaires expected to rise

Mbongeni Mguni | Monday April 17, 2023 06:00

In fact, Botswana is expected to experience one of the continent’s strongest growth rates of High Net Wealth Individuals in the next 10 years to 2032.

The estimates are contained in the latest update of New World Wealth’s Africa Wealth Report, where researchers use models to calculate wealth at individual levels in each country, with key inputs that include stock market, property, income, and GDP per capita statistics. Researchers also use historical in-house databases and account for currency, stock market, and property price movements, amongst others.

The report does not provide details on the identities of the super wealthy or any other confidential or private information.

The latest report indicates that US dollar millionaire numbers in Botswana fell from 2,120 individuals in 2012 to 1,900 last year.

“This drop was mainly caused by a weakening local currency versus the US dollar as well as some wealth migration away from the country,” Andrew Amoils, New World Wealth head of research, told BusinessWeek. “Notwithstanding this, Botswana still remains one of the wealthiest countries in Africa on a wealth per capita basis – the average wealth of a person living in the country is approximately $9,950 which ranks fourth in Africa after Mauritius, South Africa and Namibia.”

Amoils said the super wealthy in Botswana were mostly in sectors such as mining, tourism, and financial services.

Despite the fall in the past decade, researchers expect that the numbers of the US dollar millionaires in Botswana should rise between now and 2032.

“We expect High Net Wealth Individual growth of 55% in the country over the next decade (to 2032) which is pretty healthy,” Amoils said.

Forecasting the growth in numbers of the rich is a precarious affair. In 2013, New World Wealth researchers forecast that the numbers of US dollar millionaires in the country would rise from 2,300 to 3,300 by 2023. However, besides the general fall of the pula against the dollar and migration, the forecast was particularly affected by the COVID-19 pandemic and its impact on the broader economy.

The pandemic, however, did spawn at least 100 new US dollar millionaires in Gaborone alone, although suspicions persist that many of these were beneficiaries of gross profiteering and abuse of public funds from COVID-19 emergency procurement. The terms ‘COVIDpreneurs’ and ‘COVID-millionaires’ emerged in 2021, after the Auditor General released a damning probe of COVID emergency spending, which indicated that the public purse was milked by entrepreneurs who inflated prices of pandemic goods and services, sometimes with the collusion of corrupt public officers.

The fall in US dollar millionaires in the years since the pandemic suggests that those who joined the ranks of the super-wealthy through COVID-19 procurement could have dropped down the ladder.

Sustainable growth in the US dollar millionaires going forward may be helped by government’s Middle Class Strategy, which aims to produce 100 young, citizen millionaires in 10 years. Government hopes to achieve this through initiatives such as supporting franchising activities, renewable energy projects and the establishment of a presidential Top Entrepreneur Development Fund aimed at supporting graduates’ start-ups.

The strategy was unveiled in September 2021.