“It’s starts from quite a low base, which obviously helps to boost growth, but also there are a number of sectors that are doing quite well in Tanzania, including banking, construction, tourism, manufacturing, retail and transport and logistics as well. Those sectors are driving growth particularly in the millionaire space,” New World Wealth analyst Andrew Amoils told CNBC Africa.
According to the African 2013 Wealth Book report, the East African region’s newest millionaires are now likely to come from Tanzania.
Other key findings from the report include the discovery that over 30 per cent of Tanzanian millionaires live in Dar es Salaam, the capital city, and that the sectors expected to drive growth in the country in future are the telecoms, healthcare and insurance sectors.
“The biggest sector is still basic materials, but it hasn’t been growing as fast as some of the other sectors,” said Amoils.
He added that a number of African countries have a spillover trend, where growth not only occurs among the wealthy or within the economy but also spills over to the middle class. The millionaire growth in Tanzania is also growing in correlation to the country’s GDP.
Angola, for example, is the fastest growing country in terms of GDP growth over the past decade, and that growth has spilled over into the growth in wealthy individuals as well.
“At the same time, some countries that don’t have very developed banking systems often experience strong GDP growth without necessarily experiencing strong wealth growth. [This is] because of the fact that people don’t save their money, they just spend it, so the wealth doesn’t necessarily go up,” Amoils explained.
“So you often find countries that have more developed banking systems like Namibia, they are the ones that have really benefitted heavily from the economic growth over the past decade.”
A number of companies are nonetheless capitalising on the growth in millionaires through the introduction of luxury goods into markets.
While it’s still early days for luxury goods markets particularly in Africa, countries such as South Africa, Nigeria and Morocco are slowly building that niche market with success. Brands such as Porsche, Gucci and Louis Vuitton can now be purchased on the continent.
Bridging the economic divide in not only East Africa but the rest of the continent will however be essential to the sustained growth in millionaires, GDP and the continent’s other sectors.
“There are certain countries that maybe start from a slightly higher base economically, where you’re starting to see the middle class grow quite significantly in places like South Africa, Kenya, Nigeria. Some of the other countries start from a particularly low base in terms of average wealth, such as Ethiopia. They’re obviously experiencing quite strong growth in millionaire numbers without it really spilling through to their middle class,” said Amoils.