No country better sums up wealth inequality better than South Africa: Financial divisions run deep between the haves and have-nots, and despite 36 500 ‘dollar-millionaires’ living on our shores, over 50% of the population lives in poverty. However, those numbers may soon start shifting – thanks to recent emigration patterns.
According to the New World Wealth Survey, released earlier on Wednesday, millionaires are leaving South Africa at an alarming rate. Emigration data collated earlier this year shows that tens of thousands of our fellow citizens have already upped sticks and flocked abroad, but it seems there’s a high concentration of wealthy residents making up the numbers.
According to the research, over 4 000 millionaires have left SA in the past 10 years alone – and that’s an awful lot of lost tax revenue to account for. They are heading for the usual destinations, both in North America and Down Under, but there’s been a recent surge in the number of rich South Africans settling in mainland Europe, too…
“The ongoing migration of wealthy people out of South Africa is a problem. Based on our estimates, around 4 200 dollar-millionaires have left SA in the previous ten-year time period.”
“Most of these expats have gone to the UK, Australia, and the USA – with some preferring Switzerland, Israel, Mauritius, New Zealand, Canada, Portugal, Spain, the UAE, Cyprus and Malta. As a result, the total amount of private wealth in South Africa has declined by 25% since 2010 when measured against the US Dollar.” | New World Wealth
What exactly is driving these millionaires elsewhere? The evidence gathered by this report suggests the rand’s imbalance against other global currencies – and the collapse of multiple local businesses – serve as the major factors.
“In terms of wealth growth trends, South Africa has performed poorly over the last 10 years. The end-of-year exchange rate with the dollar has gone from R6.80 in 2010 to R14.70 in 2020. A large number of local businesses and SMEs have closed down in the last decade, and the Johannesburg Stock Exchange is down 12% on its comparative returns.”