Key Points
- Billionaires like Abdul Samad Rabiu have seen fortunes shrink due to excessive debt, as currency devaluation and market shifts turn liabilities into major setbacks.
- Patrice Motsepe lost nearly $900 million in 2023 after overinvesting in ARM, proving that even billionaires fall victim to volatile stock trends.
- Aliko Dangote’s $15 billion refinery project suffered costly delays due to regulatory miscalculations, highlighting the risks of overlooking critical feasibility studies.
African billionaires are often seen as financial masterminds, with a sharp eye for opportunities long before they become obvious. Their ability to turn investments into billions has earned them near-mythical status in the business world. But even the most brilliant investors are not immune to mistakes.
Wealth may offer power and influence, but it does not guarantee protection from financial missteps. History has shown that even those with vast resources, elite advisors, and decades of experience can make errors that wipe out billions.
Fortunes that take decades to build can disappear in months due to poor decisions, market downturns, or sheer miscalculation. In 2022 alone, billionaires collectively lost over $1.9 trillion, according to Forbes, as stock markets tumbled, interest rates soared, and global economies slowed. No one, no matter how wealthy, is entirely safe from financial turbulence.
South African billionaire Christo Wiese learned this the hard way, losing $3 billion after Steinhoff International collapsed in one of the biggest corporate fraud scandals in history. In Nigeria, Aliko Dangote miscalculated regulatory hurdles, leading to costly delays in his $15 billion refinery project.
Abdul Samad Rabiu’s aggressive borrowing at BUA Cement backfired, while Patrice Motsepe saw his fortune shrink by nearly $900 million after betting too heavily on market hype. Even Koos Bekker, the visionary behind Naspers, struggled to navigate the challenges of digital disruption, proving that no empire is untouchable.
It’s not just African billionaires. Bloomberg’s Billionaires Index reported that business titans like Elon Musk and Jeff Bezos lost tens of billions in a single year. While some losses stemmed from external shocks, many were the result of overconfidence, misjudgment, and a failure to anticipate risks.
Billionaires.Africa examines five of the most devastating investment blunders that have wiped out vast fortunes. These stories serve as a reminder that building wealth is only half the battle—preserving it requires discipline, adaptability, and the foresight to recognize risks before they spiral out of control.
- Strategic misjudgment and overlooking red flags
Key billionaire: Christo Wiese
Success can breed overconfidence, making even the most experienced billionaires overlook clear warning signs. South African billionaire Christo Wiese learned this the hard way through his deep investment in Steinhoff International, a retail giant that became the center of one of the worst accounting scandals in corporate history.
In 2012, Wiese became a shareholder and director of Steinhoff after selling his Lanzerac Manor and Winery in a deal brokered by Steinhoff executive Markus Jooste, a close friend. By 2014, he had traded his stake in Pepkor for 19.7 percent of Steinhoff, later increasing his holdings and becoming chairman in 2016. At his peak, Wiese was the biggest shareholder in both Steinhoff (23 percent) and Shoprite (16.9 percent).
Then, in December 2017, Steinhoff admitted to massive accounting fraud, triggering Jooste’s resignation and, years later, his suicide. Wiese briefly stepped in as acting CEO before walking away entirely. As the company’s stock price collapsed, his net worth tumbled by more than $3 billion. Major lenders—including Goldman Sachs, JP Morgan, Citigroup, and Bank of America—also suffered losses from margin loans tied to his shares.
In 2018, Wiese sued to cancel R59 billion ($20 billion) in Steinhoff share purchases, claiming fraud. The case settled in 2022, winning him R3 billion ($165 million) in cash and a Pepkor stake worth over R4 billion ($220 million). After years off Forbes’ Billionaire List, he reclaimed his dollar-billionaire status in 2023.
Wiese’s steep wealth loss serves as a reminder that no amount of wealth can replace careful due diligence. As Georg Hegel put it, “The only thing we learn from history is that we learn nothing from history.” Even the most seasoned investors must stay vigilant against risks hiding in plain sight.
- The risks of overlooking proper evaluation
Key billionaire: Aliko Dangote
Even with vast resources, billionaires are not immune to costly miscalculations. Many rely too heavily on intuition or advisors, skipping the rigorous financial analysis and risk assessment needed for large-scale investments. This failure has led to massive losses, as seen in the 2020 collapse of Wirecard, where investors—including Masayoshi Son—poured billions into the German fintech firm without properly scrutinizing its financials. When fraud was uncovered, fortunes evaporated overnight.
Nigeria has seen its share of high-profile investment failures. Billionaire Jimoh Ibrahim, for instance, expanded aggressively into banking, insurance, and oil without thorough research, leading to the collapse of NICON Insurance and Air Nigeria.
Even Aliko Dangote, Africa’s richest man, has faced setbacks due to overlooked due diligence—particularly in his $23 billion oil refinery project in Lagos. A major issue arose from his crude oil supply agreement with the Nigerian National Petroleum Corporation, now rebranded as the Nigerian National Petroleum Company Limited. Dangote expected to secure a steady supply of local crude at favorable rates, but when the NNPC transitioned into a commercially driven entity under the Petroleum Industry Act, it shifted to a profit-first model. This meant it could no longer offer crude on concessionary terms, disrupting Dangote’s cost projections and leading to financing gaps and delays.
Additional miscalculations in feasibility studies, infrastructure readiness, and regulatory approvals further extended the project timeline. Initially set for completion in 2016, the refinery remains unfinished, with estimated losses exceeding $5 billion. The lesson? As Warren Buffett famously put it, “Risk comes from not knowing what you’re doing.” No matter how deep one’s pockets are, due diligence is non-negotiable.
- The perils of overleveraging
Key billionaire: Abdul Samad Rabiu
Debt can be a powerful tool for expansion, but too much of it can quickly unravel even the strongest businesses. Nigerian billionaire Abdul Samad Rabiu knows this well.
His BUA Group borrowed aggressively to scale its cement, sugar, and petroleum businesses. But when currency devaluation and volatile commodity prices strained cash flow, liabilities ballooned to $2.98 billion. By October 2023, his net worth stood at $5.9 billion on the Bloomberg Billionaires Index. Soon after, mounting debt wiped out his ranking altogether.
Even seasoned investors like South African billionaire Johann Rupert have long warned against excessive borrowing in emerging markets. Many African tycoons have lost fortunes in retail, real estate, and oil when downturns turned liabilities into existential threats. While leverage fuels growth during booms, it can just as easily destroy wealth when the market turns. No empire is immune to overextension.
- The dangers of overexposure in investing
Key billionaire: Patrice Motsepe
Even the wealthiest investors are not immune to the risks of overexposure in a single asset or sector. Concentrated investments, especially in volatile industries, can amplify losses when market conditions shift unexpectedly.
South African billionaire Patrice Motsepe, founder and chairman of African Rainbow Minerals (ARM), learned this firsthand in 2023. His net worth tumbled by $900 million—from $3.2 billion to $2.3 billion—following a sharp decline in ARM’s share price. The stock plummeted from R288 ($15.84) on Jan. 1, 2023, to R148.64 ($8.14), marking a staggering 48 percent drop.
In response, ARM is now considering selling its $821.6 million stake in Harmony Gold to mitigate losses and reposition its portfolio for long-term stability. This case underscores a critical investment principle: overexposure, even in historically strong sectors, can lead to devastating financial setbacks.
As seasoned investors caution, "Diversification is the only free lunch in investing." True wealth preservation requires strategic allocation and a disciplined approach to risk management.
- Underestimating industry disruptions
Key billionaire: Koos Bekker
Wealth often breeds complacency, leaving even billionaires vulnerable to industry shifts. When established players fail to adapt to technological disruptions, they risk losing everything to more agile competitors.
The fate of Blockbuster, which ignored the rise of digital streaming and ultimately ceded its dominance to Netflix, serves as a cautionary tale. A similar scenario played out in Southern Africa, where South African billionaire Koos Bekker, the mastermind behind Naspers, initially struggled to pivot from traditional media to digital platforms.
Despite early success with investments in Tencent, Naspers lagged in transitioning from print and satellite television to on-demand streaming.
The company’s slow response to shifting consumer habits led to revenue declines in core markets, underscoring the dangers of underestimating disruptive innovation. As Mark Zuckerberg once put it, “The biggest risk is not taking any risk.”
No fortune is truly safe
Even the world’s richest individuals are not immune to financial missteps. Overleveraging, market hype, industry disruption, overconfidence, and a lack of due diligence have collectively erased billions from the net worth of some of the most powerful business figures.
The key takeaway? Wealth is not just about making money—it’s about keeping it. The billionaires who stand the test of time are those who learn from past mistakes, adapt to change, and prioritize financial discipline over risky speculation. Because in the world of high finance, even the richest can lose it all.
