A recent study has revealed that Botswana's efforts to shift its economy from mining to financial services are positioning the country to rival Mauritius as a leading African hub for high-net-worth individuals and families.
As the world's top producer of rough diamonds by value, Botswana is at the forefront of regional initiatives aimed at strengthening regulations and enhancing the business environment to attract foreign investment and foster economic growth, according to the latest Africa family office report from Ocorian Ltd.
Furthermore, according to a separate report by Henley & Partners and New World Wealth, Africa is currently home to over 135,000-dollar millionaires, a figure expected to grow by 65% over the next 10 years, Bloomberg reports.
“With wealth growing across the continent, it’s natural that a number of jurisdictions have spied an opportunity to work with the region’s ultra-high-net-worth individuals and families through favourable tax and regulatory environments, expert service providers and meeting international transparency standards,” Ocorian said in its report published on Tuesday.
Moreover, a downturn in the diamond market, which accounts for the majority of Botswana's state revenue, has led to an economic slump. In response, voters ousted the ruling party, which has been in power since the country's independence nearly six decades ago, by stripping it of its parliamentary majority in the 30th October elections.
Ocorian also identified Rwanda, which aims to establish itself as a technology and innovation hub, as a potential competitor to Mauritius. Having rebuilt after the civil war of the 1990s, the East African country “has become impressively safe and secure, encouraging long-term investments in the country,” it said.
Both Botswana and Rwanda still have a way to go before they can effectively compete with Mauritius, the Bloomberg report adds, a prosperous island nation in the Indian Ocean renowned for its pristine beaches, luxury resorts, and status as a popular low-tax offshore base for investors.