NOMPU SIZIBA: AfrAsia Bank published its Africa Wealth Report for 2019. The report focuses on the preservation of wealth on the continent, the behavior of high net worth individuals and the Trend in their investment and spending behavior seen. Migration is also a hot topic, as the rich are extremely mobile and move to places where they think the grass is greener.
Now, to give us some insights into the report, I am on the phone with Ravi Teji, Head of Business Development Africa at AfrAsia Bank. Thank you for joining us, Ravi. According to your report, total assets in Africa increased by 1
RAVI TEJI : Thank you, Nompu. In the last ten years there have been many important drivers. Infrastructure growth in Africa has attracted more investment, and the new emerging African countries have become more pro-business.
NOMPU SIZIBA: The AfrAsia report refers to the five major asset markets, including South Africa, Egypt, Nigeria, Morocco and Kenya. What were the main observations on wealthy individuals in these markets?
RAVI TEJI : Most of what these countries have to offer in the area of planning and growth of financial services is easy to do business, well-developed banking systems and exchanges, as well as …… for businesses , and of course a strong FDA in the top 5 you mentioned.
NOMPU SIZIBA: So, where do wealthy people invest their money today and what do they spend on their available money or credit?
RAVI TEJI : Where to invest – it was dealing with change. In recent years, they have grown in foreign stocks or stocks in …… groups in 30 different groups …… and alternatives such as art, antiques, liquid assets by almost 1%.
And to the same extent …… We have seen a decline in the cash and bonds sector, business interests have stagnated, not much growth in this area.
NOMPU SIZIBA: So, what are some of the big cities that are gaining importance? Or have you already succeeded in getting wealthy people to live and work?
RAVI TEJI : Most of the cities I would talk about are Johannesburg in South Africa and Cape Town, Cairo in Egypt, Lagos in Nigeria and Nairobi in Kenya.
NOMPU SIZIBA: For years, a high concentration of extremely wealthy people has been living in South Africa. But South Africa seems to be losing its appeal to the rich, as Mauritius appears to be attracting more and more wealthy individuals to live there. Why is that?
RAVI TEJI : Yes, you are absolutely right. It does not only concern South Africa. It affects all Brics countries. And all these wealthy millionaires are looking for ways to hedge their overseas operations.
And they are essentially concerned that South Africa is one of the most interacting states suffering from power outages that have a huge impact on the economy. With such problems, investors have started to look outside. And this speech about a compensation-free distribution of land. Investors or wealthy individuals therefore want to increase their stakes abroad.
NOMPU SIZIBA: Yes. Of course, we always hear a lot about emigration, and it's not just wealthy individuals, but also middle-class individuals. If they get an opportunity, they apparently go out too. What do you mean as the main reason? Of course, you have talked about policy uncertainties, etc., but what other reasons are causing people to leave because the world is a fairly unpredictable place, even in developed countries?
RAVI TEJI : Right. The reasons why people apply or countries offer second citizenship are ensuring the freedom of global mobility and access, as well as security and prosperity for their families. Therefore, the middle-class professional, who starts to look at such opportunities in other countries at a young age, is preparing for a move.
NOMPU SIZIBA: I would like to highlight a country. They state that Angola's total assets decreased by 15% in 2018. What happened there and how did the wealthy people react there?
RAVI TEJI : In Angola, the local economy has had problems since the drop in oil prices. It has always been the biggest offer, and the Angolan currency has depreciated against the US dollar. So these are the main drivers that each country or investor deals with. Being dependent on a commodity and a product that brings income to the land has the effect of making people think and diversify.
RAVI TEJI : Your Growth Forecast for Prosperity Held on the World Market Over the next 10 years, the African continent will grow by 35% to around $ 3 trillion – by 2028. What In your opinion, will the main drivers of this significant increase in wealth be? From your previous answer, I assume that this is diversification within the economies.
RAVI TEJI : In any case. It diversifies, it secures. Looking at other economies that are more pro-business, they rate the banking system as a community of business functions. For example, Mauritius has a growing financial sector, so looking at … is number one. Easy transaction … well-developed banking system. We see that many African countries are working towards it or, failing that, almost collapsing and coming back to see what more sanitary products are bringing to market.
NOMPU SIZIBA: Yes. Suppose we can overcome some of the problems we have on the African continent. How significant will the African Free Trade Agreement be for this growth?
RAVI TEJI : Absolutely. That's very clear … and because Africa has to work on our borders, we have to be open to business … and we need to promote each other's markets to grow more. And I think it's a great growth initiative that's being implemented as soon as possible.
NOMPU SIZIBA: Many thanks to Ravi for your time today.