Will African countries launch a citizen investment program?
Despite denigration of the continent by Western media and lists, those who have visited or lived in Africa rate some of its countries among the best in the world. With 54 countries to choose from, Africa offers a vast number of options, depending on the criteria used.
The concept of the “One Africa Passport” means that the idea of an Africa without borders is becoming a reality.
One of the biggest challenges the continent faced was its transportation system, with accessibility being a struggle across countries.
However, in 2023, there will be more collaborative efforts to open up Africa’s airspace. Air carriers are pushing to connect more routes and cities on the continent without the need to fly out of Africa to catch another flight back onto the mainland.
As we know, Africa is a vast continent, and this opportunity will open up trade routes. It will only be a matter of time before we see land ports and dry docks and an internal push to promote peace in war zones and collaboration in areas with unrest. It will be beneficial for many if the flow of money goes smoothly, as trade means income and economic growth.
An article by the IMF states that citizenship by investment is an increasing phenomenon.
The rapid growth of private wealth, especially in emerging market economies, has led to a significant increase in affluent people interested in greater global mobility and fewer travel obstacles posed by visa restrictions, which became increasingly burdensome after the terrorist attacks of Sept. 11, 2001.
This has prompted the recent proliferation of so-called citizenship-by-investment or economic citizenship programs, which allow high-net-worth individuals from developing or emerging economies to legitimately acquire passports that facilitate international travel in Europe and the Schengen area.
There are several reasons why people are becoming interested in investing in other countries, but the main reason is that it provides a useful alternative to immigration.
In some cases, the benefits of citizenship are apparent. For example, if you and your family are planning to move to another country in the near future, it makes sense to become citizens of that country as soon as possible, especially for families who want to move to a country where they do not have family connections or close friends. In such cases, it is worth paying a lot of money for residency in that country so that you can officially be classified as a citizen.
In other cases, however, it makes more sense to invest in the country first and then apply for citizenship later on. For example, if you are planning to move to a foreign country at some point in the future and you already have children living there, it may be more cost-effective to become a citizen of that country than to move your family there. Similarly, if you plan to retire to a foreign country in the future and you have built up a sizable personal fortune, it may make more sense to become a citizen of the country in question than to leave your wealth behind when you emigrate.
Becoming a citizen of a foreign country is an excellent way to make a smooth transition to a new country, and it can help you settle in more quickly once you are there. Although it isn’t suitable for everyone, this option can be especially beneficial for people who are moving to countries where they do not have friends or family connections, for people who plan on retiring abroad in the future, and for wealthy people who own assets in the countries they are moving to.
Benefits of a second passport include;
- Safety and protection in a second country.
- Mobility and visa-free travel freedom (visa waiver)
- Perfect gift for your family transferring citizenship through generations.
- A Plan B option for Asset protection offshore
- A definite must-have in an investment portfolio for family offices, bankers and hedge fund managers
- Safety, privacy, protection from war, and political problems.
- Protect your wealth offshore in a stable country with a strong currency.
- Dual citizen status becoming a Global citizen expanding freedom across the globe.
- A world-class education for children at the best universities abroad.
- Opportunity to invest in international real estate markets to set up a second home.
- Tax-free planning on your worldwide income
- A passport is a modern-day insurance policy of the 21st century
- Ease of doing business
The most important reason why these ‘citizen by investment’ programs have gained so much popularity recently is that citizenships are approved very fast, usually within 2-3 months, without any trip to the country. Also, there are no residency requirements. Exceptions are that Malta requires one-year residency, and Cyprus requires six months prior residency.
Of course, there are pros and cons to both approaches, and there is a wide range of other factors to take into consideration as well. It’s important to weigh your options carefully before deciding which course of action is best for you.
So how would a citizen investment program work in Africa? The idea is simple: by investing in a country, you are helping to improve that country’s economy. If African governments started setting up these programs, they might attract a better flow of investors willing to bring more money onshore and set up businesses. Africa has long been lusted for its beauty and resources, and taking advantage of programs being used by other countries may serve the development of African countries well. There will, however, be a need to step up when it comes to governance and tax structuring, as these are some of the biggest attractions for UHNWI.
Ultimately, with a single passport for Africa, the citizen-by-investment program may open up the continent to investors with a singular buy-in. Equally so, it will make Africa the playground for its UHNWI as much as its average citizens, as they will be able to harness the AfCFTA agreement to grow across the vast land. Those in the basic food and service industries have the best advantage from the get-go. Africa is expected to have an estimated population of over 2 billion by 2050. With the right moves and policies set in place, its marketplace is set to grow as exponentially as its people.
Tsitsi Mutendi is a co-founder of African Family Firms, an organization that aims to facilitate the continuity of African family businesses across generations. She is also the lead consultant at Nhaka Legacy Planning and the host of the Enterprising Families Podcast.
