Africa’s more than 130,000 USD millionaires creating demand in luxury segment

By Conrad Onyango, bird

As Africa’s fast-growing super-affluent splurge to satisfy a desire for the finer things in life, their tastes and preferences are building one of the continent’s fastest-growing business segments – luxury.

Africa is now home to at least 130,000 US dollar millionaires and 22 US dollar billionaires, with enormous prospects for many more to join the list, according to the Africa Wealth Report 2021.

The fast-rising number of Africans flush with cash is resulting in continent-wide splurging on top-of-the-range cars, bespoke clothing and accessory brands as this group wines and dines in some of the world’s premium hotels, resorts, clubs and lounges.

In the process, they are growing the continent’s luxury market – one which, while dominated by international brands, is seeing increasing numbers of African brands.

The African luxury sector was valued at $6.1 billion in 2018 and is projected to grow quickly, making it attractive to a wide range of luxury brand and experience providers.

“With a growing young population coupled with rapid urbanisation and fast-growing consumer expenditure, Africa offers attractive opportunities for entities wishing to expand into new frontier markets,” says research firm Euromonitor International.

Total wealth held by Africans is seen growing by 30% over the next decade, to $2.6 trillion by 2030 according to the Africa Wealth Report 2021, providing high-net-worth individuals with more purchasing power to splurge on luxuries.

Tourist destinations are where rich Africans spend most of their wealth, pushing investment in the hospitality industry to new heights, with hotel brands built to international standards now dotting most parts of the continent. This sector also attracts high-net-worth individuals from overseas, helping ensure that top-end luxury experiences are available for Africans who can afford the high prices.

“The luxury hotel sector is one of the most important sectors in Africa as it brings a large amount of forex spending into the continent,” says the report.

Wilderness Safaris, Red Carnation, &Beyond, Sanctuary Retreats, Belmond, Virgin Limited Edition, The Royal Portfolio, and Singita are among the popular hotel groups for high-net-worth individuals in Africa.

Major luxury tourist destinations in the continent, according to the report, are Cape Town, Umhlanga, Franschhoek and the Kruger Park, all in South Africa.

Rich Africans are not just buying any car, they are going for a spectacular experience in the most extravagantly luxurious cars. In South Africa, you will find more high-end car brands than any other place in the continent, including Porsche, Bentley, Ferrari, Aston Martin, Rolls-Royce, Lamborghini and McLaren.

Out of the approximately 2,000 cars that Porsche sells on the continent annually, 1,200 units are sold in South Africa through a local dealership arrangement, according to the report.

Second and third-placed luxury markets, Kenya and Morocco also have local dealerships for these premium automotive models as moneyed locals go for the best grand tourers money can buy. Porsche, Bentley and Ferrari now have dealerships in Morroco, while Kenya enjoys similar access to the Porsche and Bentley car brands.

Sport utility vehicles have also grown in popularity due to their generous cargo space and rugged styling. “The Rolls-Royce Cullinan, Bentley Bentayga, Aston Martin DBX and Lamborghini Urus are currently the most expensive SUVs on the market,” according to New World Wealth, the authors of the report.

Africa’s millionaires and billionaires have also made over their wardrobes. It is now easier to spot wealthy Africans adorned in top-of-class global brands like Zegna, Louis Vuitton, Paul Smith, Gucci, Jimmy Choo and Dolce & Gabbana. Most of these brands have exclusive stores in Nigeria, South Africa, Egypt and Morroco. In other markets on the continent, local shops are stocking these premium brands as resellers.