Thursday, July 18, 2024

Only two people in Botswana have more than $100 million

A study by a global wealth intelligence firm based in South Africa says that poor Botswana has no billionaires, only two centi-millionaires, 80 multi-millionaires, 2100 millionaires and a measly US$19 billion in private hands. Compare that with South Africa (home to over twice as many millionaires as any other African country) which has five billionaires, 94 centi-millionaires, 2080 multi-millionaires, 39 300 millionaires and $651 billion in private hands.

Billionaires refers to individuals with wealth of US$1 billion or more; centi-millionaires are those with wealth of US$100 million or more; multi-millionaires have wealth of US$10 million or more; millionaires (also high-net worth individuals) have wealth of US$1 million or more; and at the bottom are mass affluent Individuals with wealth of US$100,000 or more. With a wealth per capita of $34 500, Mauritius is the richest SADC country, followed by South Africa ($10 970), Namibia ($9320) and Botswana ($7880). Where Mauritius has experienced a wealth growth rate of 74 percent over 10 years, Botswana’s has declined by negative 7 percent in the same period.

The global wealth intelligence firm in question is called New World Wealth and has been “tracking the movements and spending habits of the world’s wealthiest people for over seven years.” Its research covers 90 countries and 150 cities worldwide – Botswana and Gaborone being on those lists. The firm’s report provides a comprehensive review of the wealth sector in Africa, including trends among high-net-worth individuals (HNWIs), the luxury market, and the wealth management sector on the continent.

The 2022 report says that safety and the efficiency of the local police are the most critical factors in encouraging long-term wealth growth. Based on New World Wealth’s latest safety index, the safest countries in Africa are Mauritius, Botswana and Namibia.

The luxury hotel sector is seen as one of the most important sectors in Africa because it brings in a large amount of forex spending to the continent and also “creates a large number of well-paying jobs for local hoteliers, chefs, game rangers, waiters etc.” In the particular case of Botswana however, the use of “well-paying” would be contested by workers in this sector themselves. The 2022 report says that “a lack of international visitors has forced many luxury hotels and lodges to lower their prices to appeal to the local population.” The latter was certainly true in the case of the luxury hospitality establishments which have historically catered for foreign (and mostly white) visitors.

It turns out that high-net worth individuals, who are identified as directors, chairpersons, CEOs as well as founders and partners, gravitate towards certain major destinations in Africa, among them the Okavango Delta in Botswana. Popular hotel groups for HNWIs visiting Africa include Singita, &Beyond, Red Carnation, Sanctuary Retreats, Belmond, Wilderness Safaris, Virgin Limited Edition, Four Seasons and the Royal Portfolio.  &Beyond and Wilderness Safaris have resorts in Botswana. Three Botswana establishments make the list of Top 10 Safari Lodges in Africa. These are Sanctuary Chief’s Camp and &Beyond Xaranna Okavango Camp in the Okavango Delta and Chobe Game Lodge in Botswana. These lodges score highly in terms of reputation for quality and service; location, views and scenery; authentic bush feel as well as biodiversity in the areas of birdlife and wildlife experience.

New World Wealth considers wealth to be a far better measure of the financial health of an economy than GDP. One of the reasons the firm gives is that “in many developing countries, a large portion of the GDP flows to the government and therefore has little impact on private wealth creation.” The other is that GDP ignores the efficiency of the local banking sector and stock market in retaining wealth in a country.

New World Wealth doesn’t name names but in a 2016 interview with Forbes Africa, Ramachandran “Ram” Ottapathu, the CEO of Choppies, which is Botswana’s biggest retailer, said that his personal net worth “could be” $300 million. That would make him a centi-millionaire.


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