Africa’s economic fortune has grown by leaps and bounds over the past few years: The total wealth in private hands is estimated at $2.6 trillion today—from $1.1 trillion in 2000. But the more than doubling in Africa’s private wealth masks great differences across individual nations.
Equatorial Guinea grew each citizen’s individual fortune over the past 15 years by a staggering 1,318%. In 2000, an Equatoguinean adult was worth $1,160, now the same citizen would (theoretically) count his net assets at $16,450.
Angola, sub-Saharan Africa’s second largest crude exporter, saw private wealth expand 584% to the current $15,302. A surprise package is Eritrea, for years isolated internationally but which grew individual private wealth 486%, albeit from a low base of just over $400 in 2000.
But despite Africa having 12% of the world’s adults, they hold only one per cent of the world’s wealth. Contrast this with China, whose population currently numbers one billion or a fifth of the world’s total, hold $22.8 trillion in private wealth, or a 9.1% share of the world’s total.
But some countries have seen a decline in average wealth. Malawi saw the steepest decline in wealth per adult, shrinking 53.3% to $169 today, from $362 fifteen years ago. Madagascar, Ghana, Libya and Egypt also saw experienced declines.
Still, the growth of millionaires in Africa will outpace the global average as quickening economic expansion on the continent boosts incomes, according to Andrew Shirley, editor of Knight Frank LLP’s Wealth Report 2015. The number of millionaires in Africa will increase by 54% over the next decade compared with 31% across the rest of the world.
But Africa’s middle class might be smaller than previously thought. A recent report by Credit Suisse put the middle class at 3.3% of the continent’s 572 million adults, when considered by assets, and not income.
This means that just 18.8 million Africans can be classified as middle class if their net worth, and not what they spend, is used as the reference.
It is not a homogenous figure: some 4.3 million of the continent’s middle class—or one quarter—live in just one country, South Africa. If you also count Algeria, Egypt, Tunisia, Morocco and Nigeria this number rises to 14.1 million, leaving just 4.7 million of the middle class located in the rest of the continent—some 48 countries in total.
For broad-based growth and to lift the continent out of poverty, Africa’s best hope is investing in agriculture. The International Food Policy Research Institute has found that on average, agricultural growth reduces poverty roughly twice as much as growth in other sectors, which have fewer “trickle-down” effects.