South Africa

2014


South Africa

Signs of growth

South Africa’s average household wealth grew vigorously prior to the global financial crisis, tripling from USD 8,400 in the year 2000 to USD 25,800 in 2007. Growth was similar in constant exchange rate terms. Since 2007, progress has been slower.

In constant exchange rate terms, wealth declined a little in 2008, but growth soon recovered and gathered pace in 2013-14. Depreciation of the rand greatly amplified the wealth drop in 2008. This was reversed the following year, but more recent declines in the exchange rate mean that wealth per adult in USD terms has still not regained its 2007 level.

Household wealth is largely comprised of financial assets, which contribute 73% to the household portfolio. This reflects a vigorous stock market and strong life insurance and pension industries. Due in part to relatively low real estate prices, average real assets of USD 7,300 are not worth a lot more than the average debt (USD 5,000). South Africa is also unusual among emerging market countries in having an official household sector balance sheet, which provides a more reliable basis for the wealth composition numbers.

Like Brazil and Indonesia, South Africa has a distribution of wealth that is roughly similar to the distribution for the world as a whole, although fewer individuals have wealth above USD 100,000. Still, we estimate that 63,000 South Africans are members of the top 1% of global wealth holders and that 47,000 are USD millionaires. These numbers are up a little from last year, despite a 5% fall in the rand, reflecting strong overall growth in wealth.

2013

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