A survey released by Standard Bank has found entrepreneurship to be the most reliable way to build wealth in Africa as Africans who participated in the survey said they made their first million dollars from entrepreneurship.
Of the five nations studied, Nigerian, Ghanaian, and Kenyan respondents were most likely to identify entrepreneurship as the primary factor in wealth generation. According to the poll, 148 of the 265 entrepreneurs said they earned their first million dollars through business and continue to do so.’
However, respondents from South Africa and Mauritius were more likely to opt for a traditional corporate career in a bid to attain financial freedom. This could be attributed to the more developed financial systems of the two countries.
The majority of the survey participants were entrepreneurs who operated firms in the real estate, construction, trade, financial services, manufacturing, oil and gas, technology, and retail industries. The high-net-worth people that took part in the poll ranged in age from 36 to 50.
Group Head, Standard Bank Wealth and Investment, Chris Browne, said, “to draw a more complete picture of the wealth sector in Africa, a total of 265 respondents were surveyed and 75 face-to-face interviews conducted across five key markets — Ghana, Kenya, Mauritius, Nigeria, and South Africa — with the estimated net worth of 67% of participants in the $1 million to $5 million range. Around 16% of respondents had an estimated net worth of $5 million to $20 million. At the same time, the researchers from our partners, Intellidex, also canvassed those with $20 million to more than $100 million in net worth.”
On the topic of wealth preservation, respondents from Kenya (38%), followed by Mauritius (29%), Ghana (26%), and Nigeria (23%), mentioned tangible assets as the most preferred asset class for wealth preservation.
In South Africa, the wealthy (51%) preferred to preserve their wealth in stocks or equities. However, tangible assets such as property were comparatively less important (18%).
The survey also highlighted political instability and personal security as the main concerns of the wealthy
According to the survey, “The wealthy in most markets surveyed see the political environment as a significant risk to wealth preservation. 82% of South Africans said it was of concern, followed by Ghanaians (67%), Nigerians (64%), and Kenyans (55%). By contrast, only 31% of Mauritian respondents saw the political environment as a threat.”
“It is very difficult to make informed investment decisions if one knows the long-term visibility of the policy environment. They bear in mind that a volatile political climate can dramatically affect the value of assets,” it added.
The study found that the characteristics of wealthy Africans include workaholism, eclecticism, conservatism in wealth expenditure, and entrepreneurialism.
