1 in 3 Investment Migration Firms Plan to Open Offices in Africa This Year

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32% of respondents in this year’s Investment Migration Executive Survey said they planned to open physical offices in Africa over the next year, making the continent the top choice for new office expansions in 2021, just ahead of the Middle East.

Such expansion comes in spite of the continent’s still-low HNWI population: In 2020, Knight Frank’s 2021 Wealth Report estimates, Africa was home to a mere 231,000 millionaires – less than 0.5% of the global total.

Moreover, among all regions, Knight Frank estimates that Africa will see the slowest HNWI population growth over the next five-year period; the number of millionaires will grow by 25% from 2020 to 2025, considerably behind Europe (49% growth), Asia (46%), and Latin America (34%).

Why are so many companies betting on developing business in the continent that has both the lowest absolute number of millionaires and the lowest expected HNWI population growth rates?

Part of the answer, no doubt, is that African HNWIs are far more likely to demand investment migration services than their peers in, say, Europe, simply because the travel and settlement rights with which they are born remain dismal. In other words, there are many more prospective investor migrants per a given HNWI population in Africa than in most other regions.

In November last year, we covered the trend of top-flight RCBI specialists – including Henley & Partners, Arton Capital, Harvey Law Group, and Discus Holding – making forays into Africa. These firms are chiefly attracted by the elevated rates of growth in RCBI-program participation among Africans; in 2020, we found that the global number of Africans partaking in an investment migration program grew at an annualized rate of nearly 30% in the 2015-19 period.

IMI Research Unit has compiled a list of more than 300 institutional B2B partners with which IM companies hoping to quickly penetrate the African market can use as a starting point for building a network of feeder-firms in the wealth management, law, and private banking sectors.

Though predominantly a source market for investor migrants, some African countries are also taking steps to make it a destination for them as well:

• Egypt recently formalized a new citizenship by investment program, several years in the making, which will have a starting threshold of US$250,000 donations to the country's central bank.
• The Director of Kenya's Investment Authority said in April that he was "pushing ahead" with plans for a CIP as well and that there was little opposition to it among the country's leadership.
• The Prime Minister of Mauritius announced in his budget speech in June 2018 that his administration was planning a CIP that would begin at US$500,000, although little has been heard since.
• Rwanda's government last year approved a draft bill that to allow investor naturalization on the basis of "sustainable investment activities".

IMI columnist Anatoliy Lyetayev has outlined three reasons IM companies should make the Nigerian market a priority, and has also written about the tremendous potential of the Kenyan IM market, although he argues it may be premature to target that particular market for the moment.

In the Investment Migration After COVID report, you can see the complete results of the 2021 Investment Migration Executive Survey, get an overview of which programs have been the relative winners and losers of the pandemic year, and learn how dozens of the leading executives in the investment migration market believe the market has, and will, change as a consequence of COVID.