More billionaires in Africa than we thought? Big Deal

The real question should be "why aren't there more?"

An African business magazine has just revealed that there are 55 billionaires in Africa. Ventures magazine realised the findings with great acclamation, prompting incredulity from its title "Many more African billionaires than previously thought".

While you might be surprised to hear that there are billionaires in a continent of famine and floods, coups and corruption, don’t be. Though the famine, floods, coups and corruption are all real, the over-reporting of them with respect to other African issues leaves us with the "African stereotype".  In actual fact, with exploits of Chinese investment, truckloads of aid and buckets of oil, diamonds and gold, the real question should be: Why are there not more billionaires in Africa?

To put this into perspective, Russia, a country of similar size to the continent, which also suffers corruption, though perhaps not coups, has 92 billionaires according to WealthInsight.

"The problem with Africa..." begins many a conversation of the continent, but in terms of wealth, the problem is exodus. Many of Africa’s wealthy, it seems, would rather live in Europe. Of the Ventures top 10 lists, at least two live in Europe, perhaps more. The real story, then, is not how many billionaires there are in Africa, but how many African billionaires there are out of Africa.

To answer this question, start looking in Paris, where French prosecutors are investigating assets held by rulers and their entourages of at least half a dozen tin-pot republics. 11 supercars (including a conspicuous white convertible Rolls Royce coupé) were seized from the son of President Teodoro Obiang of Equatorial Guinea, who faces corruption charges in the US. 39 properties in Paris and the south of France are now known to belong to family and associates of the late president Omar Bongo of Gabon. And finally, 112 French bank accounts have been traced back to President Denis Sassou Nguesso of Congo (Brazzaville). 

While supercars and villas symbolise wealthy African’s penchant to show off, they are a minority. What is more worrying are the amount of transactions between African states and offshore centres. Africa is booming and investors know it – foreign direct investment (FDI) has more than doubled in the past 10 years – but with offshore centres negotiating investor protection the tax reward is minimised. Offshore financing may be fast becoming a taboo in Europe, but in Africa it’s by-the-by. Dubai, Singapore, The Seychelles and Mauritius are the offshore equivalents to Africa as Guernsey and Jersey are to us.

Any criticism of wealth not "trickling down" to the poor, as highlighted in a recent Afrobarometer survey, should therefore target those taking money out of the continent, rather than those within.

That there are 55 billionaires in Africa is no surprise, the quantity of billionaires is a good barometer of wider wealth. But if there are "Many more African billionaires than previously thought", it’s not in Africa, it’s out of Africa.

Photograph: Getty Images

Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News

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The post-Brexit power vacuum is hindering the battle against climate change

Brexit turmoil should not distract from the enormity of the task ahead.

“The UK will not step back from that international leadership [on clean energy]”, the Secretary for climate change, Amber Rudd, told a sea of suits at Wednesday's summit on Business and the environment.

The setting inside London’s ancient Guidlhall helped load her claims with a sense of continuity. But can such rhetoric be believed? Not only have recent events thrown the UK's future ability to lead on climate change into doubt, but a closer look at policy suggests that this government has rarely been leading to start with.

Rudd’s speech came just 24 hours before she laid the order of approval for the UK’s fifth Carbon Budget. This budget will set our 2028-2032 emissions target at a 57 per cent reduction on 1990 levels – in line with the advice of the independent Committee on Climate Change. And comes amidst a party-wide attempt to reassure green business that Britain is open as normal: "I think investors now should feel they have a very clear path ahead," Andrea Leadsom has insisted.

In some respects, those wanting to make the case for an independent UK, could not have wished for a better example than the home-grown carbon budget. The budget is the legal consequence of the UK’s ground-breaking domestic 2008 Climate Change Act, which aims to cut emissions by 80 per cent by 2050. And the new 57 per cent interim target also appears to put the UK ahead of European efforts on the matter - exceeding the EU goal of a 40 per cent emissions reduction.

The announcement will thus allow David Cameron to argue that he has fulfilled his husky-loving promise to provide leadership on the environment. He may even make it the basis for an early ratification of the Paris Climate Agreement, ahead of the European bloc as a whole.

Yet looked at more closely, the carbon budget throws the UK’s claims to climate leadership into serious doubt.

In the short term, its delayed, last moment, release is a dispiriting example of Westminster’s new power-vacuum. Business leaders, such as those at yesterday’s conference, are crying out for “consistent, coherent and predictable national policies” on climate change and emissions reductions. Yet today’s carbon budget can only go so far to maintaining the pretence of stability.

Earlier this week, Amber Rudd responded to a parliamentary question into how Brexit will effect the UK’s climate ambitions with a link to none other than the Prime Minister’s resignation speech. And while concrete progress on policy will have to wait for party-political power struggles politics to run their course, historic Tory hostility to green policy makes progressive change far from certain.

Supporters of Brexiteer Boris Johnson may have played down his opposition to action on climate change in recent days, quipping that he would sooner be “kebabbed with a steak knife over the dining room table” by his environmentalist father. But the recent appointment of UKIP’s Mark Reckless, from a party notorious for its climate scepticism, as the new chairman of the Welsh committee on climate change has sent shock waves through the environmental community and will do little to help allay investor fears.

More concerning still is the 47 per cent shortfall between emission targets and present reality. A progress report released today is damning evidence of the Conservative's long-term neglect of the underlying issues.

Such censure builds upon the findings of a recent study from the Energy and Climate Intelligence Unit. Far from leading Europe’s major nations on issues of energy and climate change, their research finds the UK to be distinctly middle of the pack. “Of the ‘Big Five’ economies with comparable levels of population size, GDP, ect., Britain ranks third, behind France and Spain but ahead of Italy and Germany”, write authors Matt Finch and Dr Jonathan Marshall.

A significant number of incentives for government action – such as fines for not meeting interim targets on energy efficiency – would also be nullified in the instance of Brexit. And it cannot even be claimed that our long-term ambition is greater than Europe’s: the UK’s target is an 80 per cent cut between 1990-2050, and the EU’s is 80-95 per cent.

News that the manufacturing giant Siemens is suspending new investment into its UK-based offshore wind operations could thus be set to prove symptomatic of a wider trend. And ministers must act fast to turn promises into policy.

Even  Michael Gove - the man who once wanted to take climate change off the curriculum – now describes as one of the world’s greatest challenges. While according  to the new shadow secretary for energy and climate change, Barry Gardiner: “The government can no longer wait until December to publish its Carbon Plan. It must do so now.”  

Included in such a plan should be clarification of the UK’s relationship to European emissions trading, the development of a Carbon Capture & Storage strategy, and urgent action on heating and transport efficiency. The 5th Carbon Budget is an important step towards this process but Brexit turmoil should not distract from the enormity of the task ahead. Nor from the damning fragility of Cameron’s environmental legacy to date.

 

India Bourke is the New Statesman's editorial assistant.