Another report, by New World Wealth,
said Lagos was home to 61 percent of Nigeria’s 15,700 high-net-worth
individuals (HNWIs), according to New World Wealth.
The report which covered “HNWI volume,
wealth and allocation trends from 2007 to 2013” notes that number of
Nigerian millionaires increased to 15,700 in 2013 from 35,682 in 2007,
the third highest after South Africa and Egypt.
In 1965, Nigerian millionaires that
emerged after a swathe of African countries gained Independence in the
1960s were covered in an article by Time magazine. The Time magazine
article noted the education, experience of and found their
sophistication in trade and finance surprising.
Zeroing in on Nigeria, “Africa’s
most populous and most prosperous nation” the 1965 article said the
number of Nigerian millionaires was increasing as fast as Nigeria’s 4
percent GDP growth rate. Today the number is growing much faster, thanks
to a booming economy.
Prudent macroeconomic policies and
political stability coupled with a wave of reforms e.g. privatization of
the telecoms industry, pensions funds, the banking and financial sector
etc is generating nouveaux riches.
The millionaires that made Time list
were mostly engaged in exporting groundnuts (Sanusi Dantata); transport
and logistics (Odumegwu Ojukwu, Mobolaji Bank-Anthony); oil and gas
(Emmanuel Akwiwu and Shafi Lawal Edu); innovators like Timothy Adeola
Odutola and Ade Tuyo started a bicycle factory and bakery respectively
to cater for Nigeria’s growing consumers. Ade Tuyo, to convince bankers
that he was in fact in business, named his bakery De Facto Works Ltd.
The savvy Bayo Braithwaite then “one of Nigeria’s younger businessmen”
left a British insurance company to start African Alliance Insurance to
sell insurance to Nigerians, a no-go area for his former employers.
Back in the 1960s oil and gas was a
minion. Today, though its contribution to the economy is contracting, it
is minting millionaires and billionaires. Forbes’ list is packed with
Nigerians earning significant rent from oil and gas.
A booming economy complemented by higher
house and stock prices half explains the growth in wealth. Interests in
oil and gas explain the other half – 24 percent of the wealth was from
oil and gas.
However, the expanding non-oil sector will probably produce more wealth as Nigerians venture into agriculture. But don’t write off the gas sector yet; Nigeria is said to be a gas province that happens to stumble into oil.
In its report, the South Africa-based New World Wealth asserts that Nigerian high-net-worth individuals, i.e., people with $1 million dollars in investible funds, not counting businesses and homes, outperformed the worldwide average.
Expect more wealth managers to flock to
Nigeria as number of high-net-worth individuals grows. Already, about 26
percent of the wealth of HNWIs is domiciled in private banks located in
the UK, Switzerland and the Channel Islands. A bank like Standard Bank
has changed its focus – all its eyes are now on Africa.
New World Wealth says the number of high-net-worth individuals in Nigeria will swell by 47 percent to 23,000 in 2017. Will Nigerian millionaires and billionaires invest more in Nigeria?
Unemployment and the number of poor
Nigerians are rising. Doing business in Nigeria is daunting and, unlike
Ade Tuyo’s bakery, SME’s hardly have access to bank finance.
Aliko Dangote, the richest African, considers these problems as opportunities.
Nigeria’s infrastructure deficit will
guzzle most of his cement. Dangote sees his conglomerate as an incubator
of high-growth companies, plans to grow it by 500 percent into a $100
billion conglomerate that will employ 200,000 people by 2017.
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