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South Africa mints plenty of new millionaires but isn’t spreading the wealth

Reuters/Rogan Ward
The spoils of wealth
By Omar Mohammed
Published Last updated This article is more than 2 years old.

South Africa is the second biggest economy in Africa with an annual GDP of over $360 billion. It’s also home to some of the continent’s richest people.

A new report by New World Wealth, an information consulting services firm, says there are close to 47,000 “high net-worth individuals” (HNWI) in South Africa. These are folks who are worth at least $1 million a year. They possess a combined wealth of $184 billion and constitute 31% of the country’s overall wealth.

So where does all this wealth reside? According to the report, cash and bonds account for 30% of HNWI wealth.

The trend suggests that since 2007 the number of HNWIs has grown by about 9%, with the actual volume of their wealth also going up 9%. The analysts from New World Wealth expect the trend to grow even further by 2017.

When it comes to racial make-up, perhaps unsurprisingly, white South Africans are the highest proportion.

The report also points out that Johannesburg, South Africa’s second largest city, has the highest number of millionaires. But Durban made the biggest jump growing by 200% since the year 2000.

One wonders, though, for a country with so much wealth, why did Bloomberg deem it to be one of the most stressed-out places to live in 2013?

Well, simply put, the wealth being generated is ostensibly limited to the few. For example, unemployment stands at 24%, well above emerging-market averages, and it’s the highest amongst the world’s top 40 economies, the report says.

Meanwhile, decades after the end of apartheid, the inequality gaps still persist, creating tensions in the country’s social fabric, as the recent anti-immigrant attacks demonstrated.

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