THE number of South African super-rich previously disadvantaged individuals had risen to 75 by the end of last year, from less than 40 five years ago, mainly due to black economic empowerment (BEE) deals, according to a study by London-based business information provider WealthInsight, released yesterday.
The research comes amid continuing debate in SA regarding the success rate of the government’s BEE programmes in distributing wealth to previously disadvantaged groups. There are widespread views that the government’s empowerment policy is only benefiting politically connected individuals.
SA has 543 super-rich people whose combined wealth amounted to $72bn at the end of last year, the report said. Seventy-five are previously disadvantaged, representing 14% of the total.
WealthInsight said that although this was a relatively low percentage considering that previously disadvantaged groups — including Africans, coloureds, Indians and Chinese — made up 90% of the population, it was an improvement from the fewer than 40 recorded at the end of 2007. "Although they are growing, the number is still relatively low," Andrew Amoils, senior analyst at WealthInsight, said.
Financial services accounted for the biggest industry in which the super-rich individuals participated, followed by basic materials, and manufacturing.
The high-net-worth individuals’ wealth group comprises the billionaire, "centimillionaire" and affluent millionaire wealth bands. Their wealth is usually in equities, bonds, cash and deposits, fixed-income products, real estate, alternative assets and business interests.
Centimillionaires are individuals with wealth of more than $100m and less than $1bn. Affluent millionaires are those with wealth of more than $30m and less than $100m.
The report looked at developments from 2007-11 and found that of the 543 individuals, four were billionaires, 153 were centimillionaires and 386 were affluent millionaires.
Mr Amoils said WealthInsight expected the number of previously disadvantaged super-rich people to rise to more than 150 by 2016. He said it expected the same BEE participants to benefit.
"We expect a continuation of the BEE programme, and the people that are currently high net worth could join the ultras by 2016.
"It’s the same people that are involved in multiple BEE deals. If they (millionaires) continue to be involved in more deals, then they will become like Cyril (Ramaphosa) and Tokyo (Sexwale)," Mr Amoils said.
Martyn Davies, an analyst and the CEO of research, strategy and investment advisory firm Frontier Advisory, said he believed education was central to empowerment. "When we as a country start providing decent education to people, it’s then that we will realise true empowerment."
WealthInsight research showed that among all millionaires, or high-net-worth individuals, there were just over 12,500 South African previously disadvantaged group millionaires at the end of last year, representing 28% of SA’s total millionaire population of just over 44,700 individuals. Figures showed that the number of billionaires declined by 15.8% over the review period, while the number of centimillionaires and affluent millionaires increased by 18.4% and 21.3% respectively.