Mauritius is the top ranked country in Africa in terms of per capita wealth, followed by South Africa and Namibia; this is according to a study by New World Health.
The study is titled, The W20: The Wealthiest Countries in the World, ranked the top 20 countries in the world by individual wealth and then by a country average.
“I think looking at wealth is a much better thing to look at than GDP (Gross Domestic Production), which is why we did the study because GDP has a lot of issues, mainly through double counting or triple counting,” said Andrew Amoils, Head of Research at New World Health.
He adds how a country’s GDP can be inflated like in Nigeria which included the informal sector in its GDP which elevated them to the biggest economy in Africa.
Globally Switzerland ranked the highest in per capita wealth at 258 100 dollars.
“The number of people living in poverty in Switzerland will be pretty much zero because there’s massive social benefits – there’s only about six million people that are Swiss citizens,” said Amoils.
What this type of measurement can’t tell you is how many people are under the poverty line but Amoils believes it’s a better measure of how a country is doing.
If we had to look at African countries, places like Namibia, Botswana, Mauritius and South Africa would be the closest to equal he says.
“Although people say South Africa is bad, it’s not bad compared to the rest of Africa.”
Not one African country made it to the top 20 global lists.
Amoils reckons we could change this by improving economic growth, by not letting the population get out of hand, ownership rights are key.
“Development of free media and banking systems would help a lot – those are all linked because you need a free flow of information for those types of sectors to succeed – something South Africa has done well,” he said.
“Certain countries such as India and Indonesia make the W20 due to their large populations. On a per capita basis, they are quite poor.”
The opposite also impacts on the findings so several wealthy countries on a wealth per capita basis won’t make the W20 due to their low populations.
On a wealth per capita basis, the study shows Angola and Ghana as the fastest growing countries in Africa in the past 15 years.
This is because Angola has had massive economic growth since 2000, almost 600 per cent and a lot of the wealth stays private, as well as the oil and gas boom contributed to growth.
Ghana has quite a competitive banking system, financial services and construction developments and a healthy political environment for African standards, as it switches between parties without too much instability says Amoils, which is very encouraging to investors.
The report states that Zimbabwe was the only African country to experience a decline in per capita wealth during the same period.
“It was one of the top ranked African countries when you go back, but now there’s a lot of countries that have leapfrogged them, you actually need to grow just to keep up, Zimbabwe hasn’t managed to do that,” said Amoils.
He says a lot of the problems relate to ownership rights and a lack of free media.
“At some point there was some optimism in a recovery story for Zimbabwe but that is no longer the case, the impression I get is that people have pretty much given up on Zimbabwe as an investment destination,” he said.
“I think Zimbabwe unfortunately might never recover.”