The South African rand experienced a significant drop to a 2023 low of 18.636 local currency units per dollar on 7 March, just weeks after reaching its strongest exchange rate versus the US dollar.
The depreciation of the rand has resulted in downward pressures on asset values and company valuations, which could potentially threaten the net worth of South African billionaires.
The rand’s decline is attributed to several factors, including expectations of higher US interest rates, weaker-than-expected growth data, power shortages, and the country’s recent grey-listing by the Financial Action Task Force (FATF).
The South African rand has experienced a significant decline since reaching its peak on 12 January, 2023, plunging nearly 10% and resulting in a year-to-date drop of 7%. As a result, it is currently one of the worst-performing African currencies this year.
The rand’s depreciation has been attributed to various factors, including the country’s grey-listing by the FATF, which aims to combat money laundering and terrorist financing, as well as ongoing electricity shortages that have led to extended blackouts for many homes and businesses. South African President Cyril Ramaphosa has responded by appointing the country’s first minister of electricity.
As a result, about five out of the possible seven South African billionaires, whose wealth is predominantly tied to companies operating in South Africa, are expected to see significant declines in the market value of their assets and stakes – including Stephen Saad, whose net worth remains below US$1 billion.
According to data tracked by Billionaires.Africa, these are top five South African billionaires whose net worth could potentially be impacted by the recent depreciation of the South African Rand against the US dollar in 2023.
#1 Patrice Motsepe
Patrice Motsepe, a highly accomplished South African billionaire, is widely recognized as one of the most successful businessmen in the country.
In addition to founding African Rainbow Minerals (ARM), a prominent mining company with diversified interests in precious metals, coal, iron, copper, and more, he has also established Ubuntu-Botho Investments and has a significant ownership stake in African Rainbow Capital.
Motsepe’s net worth primarily stems from his impressive 39.7-percent stake in ARM, which is currently valued at US$1.2 billion.
The recent devaluation of the rand has seen the market value of his stake shed $90 million.
#2 Michiel Le Roux
Michiel Le Roux, the founder of Capitec Bank, one of South Africa’s prominent retail banks, is considered among the wealthiest businessmen in the country due to his 11.41-percent stake in the Stellenbosch-based banking firm.
Presently, his stake in Capitec is worth US$1.23 billion, though its market value would have been US$1.32 billion if not for the recent depreciation of the rand.
Continued next page