African Powerhouses Struggle to Retain High Net Worth Individuals: CS Global Partners
LONDON, Feb. 14, 2022 /PRNewswire/ -- Africa's largest economies performed poorly in a global report ranking of 187 nations that appeal to High-Net-Worth Individuals (HNWI).
The 2022 World Citizenship Report (WCR) found that Africa's dominant nations including Nigeria, Egypt, and South Africa, were not meeting the needs of their affluent citizens.
Developed by CS Global Partners, the world's leading government advisory and marketing firm, specialising in residency and citizenship by investment solutions, the report looks at five motivators which the wealthy consider important for their lives to thrive. These are:
- Safety and Security – The ability to enjoy greater social safety and security for oneself and family and a safety-net against being trapped in a dangerous territory.
- Economic Opportunity – The ability to access major business hubs and increased access to better employment prospects and wider business opportunities.
- Quality of Life – Being able to access territories with higher social and institutional stability, higher standards of education and healthcare.
- Global Mobility – The ability for greater freedom to travel for business and leisure and the insurance policy to enable travel for medical or safety emergencies.
- Financial Freedom – Being able to diversify assets across different geographies, being able to protect assets from government overreach or corruption and being able to facilitate wealth structures in a more tax efficient manner.
"Being bound to a single country and its government can limit your freedom. With current global uncertainty, travel restrictions, and crises, investors are concerned about future market volatility and the security of their wealth, assets, and lifestyle within their home countries. This uncertainty further fuels the desire among wealthy individuals to incorporate second citizenship as part of their portfolio," says Micha Emmett, CEO of CS Global Partners, the world's largest government advisory and marketing consultancy specialising in Citizenship by Investment.
Safety and Security Trumps Global Mobility for African Investors
Even though mobility means increased freedom and accessibility for global citizens, the WCR found that safety and security rank highest – an area that African markets struggle with the most.
This motivator relied on numerous sources of data including the Global Peace Index (GPI), an annual report produced by the Institute for Economics and Peace (IEP) that estimates the relative position of nations and regions according to their levels of peacefulness.
The safety and security motivator measures the extent to which second citizenship can offer greater safety and security and comprises of several factors, including a country's control on corruption, the rule of law, regulatory quality, government effectiveness, political stability or no violence, and voice and accountability.
With a GDP of just US$17 billion in 2021, only Botswana made the top 50 in this motivator. The nation was ranked at 38.
Africa's three powerhouses – South Africa, Egypt and Nigeria – did not fare well in the WCR in the safety and security motivator as all of them have been experiencing some sort of socio-political issues that have led detrimental consequences on their people, whether it be high unemployment or very low levels of business confidence.
South Africa came in at 79, while Egypt was ranked at 139 and Nigeria at 147.
It is often assumed that HNWIs can buy security for themselves and their families, but no single individual can be exempt from significant political upheaval or serious social turmoil. That is why being able to avoid enduring a situation of conflict where one is constricted is of immeasurable value.
It is also interesting to note that acquiring a sense of safety and security is one of the biggest motivations when it comes to migration. According to the United Nations, the number of individuals who had fled conflict, crises, persecution, violence, or human rights violations between 2000 and 2020 doubled from 17 to 34 million. For HNWIs and global citizens, a nation that can offer protection in public spaces, guard against wrongdoing and curate a politically stable domestic environment holds great value.
Countries with Citizenship by Investment Programmes Fare Better in WCR
The COVID-19 pandemic cemented the fact that not all countries are created equal, many governments around the world were not able to adequately protect their citizens and meet their social and economic needs.
As a result, many HNWIs are focusing on the importance of issues such as their quality of life, healthcare, safety, security, and financial planning.
The pandemic's impact on areas such as global mobility, quality of life and economic opportunity is of relevance to HNWIs seeking additional citizenship either through traditional routes or through Citizenship by Investment (CBI).
Currently, about a dozen countries offer CBI solutions, many are concentrated in the Caribbean region, these include St Kitts and Nevis, Dominica, St Lucia, Antigua and Barbuda, and Grenada.
Interestingly, the Caribbean nations that provide CBI options ranked in the top 30% of the WCR and scored highly in the Safety and Security, Quality of Life and Global Mobility motivators, proving that these locations can be an ideal for investors seeking to secure a better future for themselves and their families.
Caribbean and African ties run deep – the territories have shared history and culture and a lot is being done to strengthen and foster Caribbean-African relations and increase their bargaining power with the world. Last September, for example, leaders from the African Union and the Caribbean Community (CARICOM) convened the first Africa CARICOM Summit.
Why Second Citizenship through an investment route
CBI programmes offer the opportunity to legally acquire the citizenship of a country in return for a contribution to a government fund of that country or an investment into one of its pre-approved real estate projects. Such programmes confer citizenship status without adding any serious burden onto an investor's life, provided that they successfully pass all of the due diligence checks required, make a qualifying investment, and submit all the correct documentation.
There are many benefits to having dual citizenship, including greater global mobility, new economic opportunities, better quality of life, and improved personal security.
It is for these reasons that HNWIs have begun to view having second citizenship as a crucial asset – greater global mobility and a way to enhance their quality of life while ensuring a bright future for themselves and their families. Furthermore, they regard it as a powerful tool to diversify their wealth and assets.
CS Global Partners has identified the challenges faced by global citizens and the opportunities that they require for future growth, family succession and economic prosperity and, in understanding their needs, are able to guide the process of matching progressive and innovative countries with skilled, talented, and wealthy individuals.
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SOURCE CS Global Partners
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