By:Lavinia Shawapala
The expected rise in the number of millionaires won’t boost the Namibian economy, warnedlocal economist Omu Kakujaha-Matundu.
The 2023 Africa Wealth Reportrevealed that roughly 2,150 millionaires presently reside in Namibia, with over 10,000 predicted by 2040.
Talking The Villager, Kakujaha-Matundu stated that he was not challenging the statistics made public.
“I am not disputing the growth of the number of millionaires but I am rather saying that it won’t make the economy grow and it won’t stop unemployment,”he indicated.
Kakujaha-Matundu said that the study looked at Namibia’s GDP per capita and gave it an upper-middle-income status.
He said the figures may be accurate because the data was supposed to have come from financial institutions, but he also asked if the millionaires would all be locals to spend the money.
“If you look at the big shareholders of the big financial institutions it’s a mixed story. The reason why you want more medium is that those millionaires are going to create employment in terms of establishing manufacturing plants,” he explained.
The economist said the Namibian economy would expand as a result of the increased job prospects if the billionaires are locals.
He said that this would increase the economy’s purchasing power.
If the millionaires are not connected and are simply splitting the money they obtained, as well as selling things like EPL rights to Australians or decision rights to individuals in Spain, Kakujaha-Matundu said Namibia’s economy won’t flourish.
He continued by saying that it would just continue the widespread poverty and income inequalities that already existed.
“But what you are saying is that based on GDP per capita this is a wealthy nation. We are in the range of top ten but top ten for the wrong reasons because they are saying that we are second to South Africa when it comes to inequality,” he said.
The economist stated that it’s conceivable for those with shares or upstream operations to enhance their income and become millionaires.
According to the latest New World Wealth report, Namibia is in a prime position to become the continent’s next major centre for millionaires thanks to its wealth of natural resources, low population density, robust energy and transportation infrastructure, and, most importantly, its high level of safety and security in comparison to its neighbours.
The term “millionaires” in the study referred to high-net-worth people having investable wealth of at least $1 million USD or more.
The study identifies Namibia’s safety, low tax rates, and advanced banking system as major drivers of potential future growth.
It further said that the maximum income tax rate is a moderate 37%, and probably most significantly, that there is no inheritance tax or capital gains tax in the nation.
“Other than profits on the sale of mining and petroleum licences/rights, and the transfer of any share/interest in a company owning a mineral/petroleum licence or right, capital gains are not taxed in Namibia,” the report stated.
The Namibian currency, which is tied to the South African Rand, is also mentioned in the study.
Given that the South African Rand is the most widely traded currency in Africa and one of the top emerging market currencies globally, the analysis concluded that the nation’s economy is relatively stable.
“The peg also creates a convenience factor for expats that move frequently between the two countries,” New World Wealth.
Additionally, the survey said that Namibia already has a variety of upscale residential neighbourhoods that attract rich purchasers, including Ludwigsdorf and Klein Windhoek, Vogelstrand and Langstrand.
As a result, it mentions that there are an increasing number of estates that offer a luxurious lifestyle, such as the Finkenstein Estate, Am Weinberg Estate, and the planned Presidents Links Estate.
“Perhaps Namibia’s greatest advantage lies in its low population density. It has one of the lowest population densities in the world, with only three people per square kilometre, according to the latest World Bank data.”
The 2023 edition reveals that the ‘Big 5’ wealth markets in Africa — South Africa, Egypt, Nigeria, Kenya, and Morocco — together account for a significant 56% of Africa’s high-net-worth individuals and over 90% of the continent’s billionaires. However, their continued dominance is far from assured, and they could soon be challenged by the likes of Mauritius and Rwanda, which are fast gaining ground. Namibia’s new residence by investment offering positions it as a future potential rival as well, the reported stated.