Billionaire reshuffle

The latest shake-up of the world’s billionaire hierarchy has seen Nigerian industrialist Aliko Dangote relinquish his crown as Africa’s richest person, after a 13-year reign. But while Nigeria loses out, South Africa gains, with Johann Rupert – whose empire includes investment holding company Remgro and Swiss luxury goods company Richemont – now holding the mantle.

According to the latest Bloomberg Billionaires Index, released late last month, Rupert’s net worth now stands at R270-billion, having surged by R36-billion over the past year, mainly on the back of a strong showing by Richemont, which the 74-year-old tycoon founded in 1988. This boost has propelled him to 147th worldwide in terms of wealth.

Dangote’s net worth, in contrast, has shrunk by about R30-billion to R253-billion. The decline is attributable to the challenging economic environment in Nigeria, to which much of his fortune is tied. He has an 86% stake in Nigeria-headquartered Dangote Cement, with a presence in the West African nation and nine other countries on the continent. He also has investments in Dangote Sugar, Nascon Allied Industries, United Bank for Africa and interests in food manufacturing, fertiliser production and petroleum.

The economic challenges in Nigeria, mostly the result of years of economic mismanagement, include a debilitating shortage of dollars, which President Bola Tinubu tried to fix shortly after taking office in May 2023 by relaxing long- standing foreign exchange restrictions. He believed this would trigger an influx of foreign capital and eventually make Nigeria a more attractive investment destination.

But the upshot was a massive 70% devaluation of the naira against the dollar and a surge in inflation to 33.4% currently, a nigh three-decade high.

Dangote had very little chance of maintaining, let alone growing, his net worth under these circumstances. This highlights the need for African governments to improve their economic management to make their countries more attractive investment destinations.

In the latest Bloomberg rankings, two other South Africans feature in the top five in Africa: Nicky Oppenheimer, with a net worth of R200.5-billion, is Africa’s third-richest person, and Natie Kirsh, with R162.2-billion, is in fifth position. Placed fourth is Egypt’s Nassef Sawiris, with R166.2-billion.

The world now has more dollar billionaires than ever before – 2 871 at the beginning of this year, which is 26 more than the record set in 2021. They are getting richer, too, worth an aggregate of $14.2-trillion, up by $2-trillion from 2023, according to Forbes magazine’s 2024 World’s Billionaire List.

While the super-rich are celebrated is some quarters, they have not escaped criticism from others. Critics, including US President Joe Biden, have voiced concerns about extreme wealth inequality. Biden has advocated for a tax on the ultra-wealthy, proposing to raise $500-billion over ten years by imposing a minimum 25% tax on Americans with wealth exceeding $100-million.

This proposal represents a reversal of former President Donald Trump’s Tax Cuts and Jobs Act, which was signed into law in 2017.

The tax policy polarisation between Trump, who is once again vying for President in the upcoming November elections, and Biden, who has made way for Kamala Harris as the Democratic Party’s candidate, can be traced to the 1980s, when the idea of ‘trickle-down economics’ was proposed. It holds that, through a natural process, some of the wealth created by, and for, those at the top will trickle down through the rest of the economy. Proponents argue that, by empowering the super-rich, economic prosperity will be enhanced for all.

In reality, this has not happened, with International Monetary Fund statistics showing that more than half the world’s countries and nearly 90% of advanced countries have experienced an increase in income inequality over the past three decades.

This may give ammunition to billionaire- bashers. But it’s important to recognise that figures like Rupert, South Africa’s biggest individual taxpayer for the past 20 years, are actively contributing to positive change.

Rupert and his family support numerous educational and environmental initiatives. These include the Nelson Mandela Children’s Fund, the South African College for Tourism and Ikamva Labantu, which works through community-led projects to unlock the country’s potential.

Rupert also donates his remuneration as chairperson or director of various boards.