Real estate is the most common economic sector for entrepreneurs in Nigeria, South Africa and Kenya according to Standard Bank’s Africa Wealth Report 2020.
The most widespread way high net-worth Africans build wealth is through entrepreneurship with the favoured industries in the five biggest sub-Saharan African economies being real estate, construction, trade, financial services, manufacturing, oil and gas, technology and retail.
In Kenya, real estate is the preferred industry by entrepreneurs followed by construction, trade and manufacturing.
According to the survey, 73% of Kenyan high networth individuals own residential property rentals while 45% own commercial property. Another 77% own farmlands while 18% have foreign property investments.
Further, the survey showed that most Kenyans (38%) prefer tangible assets like property as the primary mode of wealth preservation, followed by investments in businesses (25%).
Respondents in Kenya (38%) followed by Mauritius (29%), Ghana (26%) and Nigeria (23%) stated tangible assets as the most favoured asset class for wealth preservation.
In South Africa, stocks or equities (51%) were by far the most popular asset class for preserving wealth, with tangible assets such as property comparatively less important (18%).
The study found that in Africa, the primary vehicle chosen for consolidating and preserving wealth was property– from urban residential and commercial, through to industrial property, farmland and agribusiness.
Real estate was the preferable asset class for consolidating and growing wealth in most African markets outside South Africa where stock exchanges are both smaller in terms of overall market capitalization and liquid.
Overall, most entrepreneurs prefer reinvesting income into their own businesses while most professionals preferred property and stocks.
“Wealth preservation is unique to each individual, but what is clear is that property has a powerful psychological impact on most people,” says the report.
Generally, homes were seen as tremendously important with between 92% and 98% of respondents from all countries surveyed owning their primary residential residence.
The comprehensive survey was completed by 265 high-net-worth Africans from Kenya, Ghana, South Africa and Mauritius. 148 of the 265 respondents cited entrepreneurship as their chosen path towards accumulating their first $1 million