There may now be more billionaires in Africa than in Latin America

There may now be more billionaires in Africa than in Latin America
Image: Reuters/Akintunde Akinleye
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It appears that there are far more super-wealthy Africans than anyone realized.

According to Venture magazine’s list of the richest people in Africa, released today (Oct. 7), the continent is now home to 55 billionaires worth an estimated $143.88 billion altogether. The magazine says its list is among the most comprehensive ever compiled. Forbes by contrast, estimates that there are only 19 billionaires in Africa today. The extent of wealth in Africa can be hard to measure, as much of it is either illicit, or kept secret for fear that authorities will assume it’s illicit.

But if Africa indeed has 55 billionaires, it may have surpassed Latin America, which has 51 of them, according to Forbes. (The figures aren’t directly comparable—Venture doesn’t list billionaires in Latin America—but Forbes’ count for Latin America is less likely to miss a large number of them.)

And if so, the reason isn’t hard to see. The 21st century started well for Latin American business bosses, but the past few years have proven less lucrative. Dwindling demand for the region’s commodity exports in the wake of the global slowdown has hit several elite money-makers. The most famous casualty is Eike Batista, Brazil’s former richest man, who has lost almost all his wealth, but in all, Latin America has lost over 40 billionaires in the last six months alone, according to Forbes.

By contrast, over a decade of sustained growth has helped a handful of savvy African businessmen get rich by investing in financial services, mining, construction, energy and retail. The continent’s wealth of oil reserves has played an equally important role in building its pool of billionaires. Roughly a fifth of Africa’s uber-wealthy, including two of its ten richest people, have built at least a significant portion of their empire on oil. Africa’s period of growth has coincided with a rise in the price of oil, which cost roughly $20 a barrel in 2000 but is nearer $105 today.

Africa’s richest man, Aliko Dangote, who is worth an estimated $20.2 billion according to Venture, runs the largest manufacturing firm in West Africa. Although his Dangote Group controls lucrative sugar refineries, salt processing facilities, and beverage manufacturers, its most successful asset is Dangote Cement, which operates in 14 countries and has a market cap of $20 billion.

Venture magazine’s list of billionaires may still be too short. The continent’s knack for stealthy and often corrupt means of money-making means other billionaires may be lurking in the shadows. “I am sure that there are more billionaires than those 55, but discussing wealth is still taboo in Africa,” Ventures founder Chi-Chi Okonjo told the Financial Times (paywall). The real number of billionaires in many African countries, including Nigeria where nearly half of the continent’s estimated 55 billionaires live, is likely twice the current estimate, says Okonjo.

However, while Africa may be overtaking Latin America in creating rich people, it is still leagues behind when it comes to improving the lives of the poor. Roughly 50% of those living in Sub-Saharan Africa still live below the poverty line, compared with the roughly 5% that do in Latin America. Africa is also home to two of the world’s three most financially unequal countries, South Africa—the world’s worst offender—and Nigeria—the world’s third most unequal. Brazil, Latin America’s largest economy, is the world’s second most unequal nation.