What if Billionaires were African Countries?

I watched The Big Short last night.  It’s hard to picture just how much money, say, a billion dollars really is.  Ryan Gosling’s character at the end of the movie gets a check for $47,000,000—a lot of money to be sure, but then you think, that’s probably around what the real Ryan Gosling makes in a year or two with 4-5 movies.  Many of the characters walk away with $100 or $200 million.  Again, that’s a lot of money, but when you start comparing it to the likes of Mark Zuckerberg, as Wait But Why has, you start getting into territory that is hard to picture because, quite simply, you start running out of things that you can’t buy.

When we talk about billionaires, we often find ourselves scoffing that with so much money, you’d have to start buying countries.  I’ve sometimes joked that it’d be fun to have my own “banana republic.”  But just how realistic would that be?

More realistic than you might think, it turns out; the world’s richest people could probably buy several banana republics.  Indeed, Oxfam recently released a study which found that the world’s richest 62 individuals possessed as much wealth as the poorest 50% of humans.

So what does that actually look like?

To try to picture this, I started comparing the GDPs of African nations to the fortunes of the world’s billionaires, assigning nearly every African country to a billionaire whose net worth nearly approximates that nation’s annual GDP.  Data for GDP comes from the World Bank, and billionaires’ net worth from Forbes.  What I got was this map:

Africa billionaires final

Now before we go on, a quick disclaimer, and word on methodology.  First, I’m aware that comparing net worth to GDP is not an apples to apples comparison.  Net worth is a static summation of a person’s wealth, whereas GDP is an annual figure of production.  (As David points out in the comments, wealth is a stock while GDP is a flow [updated 01 May 2016]).  So these billionaires couldn’t actually buy most of the countries in question—that would require them to sum up the value of the countries’ discounted future GDP over the next 10-30 years.  (Though Bill Gates actually could buy Rwanda if you assume a startup-like valuation of 10x revenues.)  It’s more accurate to say that the billionaires on this map could buy all the goods and services produced in their respective countries in a single year.

And that’s still pretty impressive.  Most of us could not afford to buy all the inventory in a single Target store at any given time, but Mark Zuckerberg could walk into the Democratic Republic of Congo and buy everything that country produces in an entire year.

Congo has 85 million people.  About the same as Germany.

Second, note that the person listed on each country is not necessarily the very closest match between GDP and net worth.  When there were several billionaires of similar net worth—say, $12.5 billion compared to $12.9 billion—I would usually go with the better-known person to make it easier to visualize.  So even though Mauritania’s $5.06 billion GDP is slightly closer to Kirsten Rausing’s $5.1 billion than George Lucas’s $5.0 billion, I went with Lucas because you’ve probably heard more about Star Wars than Tetra Pak.

So what’s interesting on this map?

First, you’ll notice just how full the map is of billionaires’ names.  There were only six countries whose annual production could not be topped by a single individual’s wealth.  Those were Angola, Morocco, Egypt, Algeria, Nigeria, and South Africa.  (And if you were to add together the fortunes of the Walton heirs, they would top Angola and Morocco).  Billionaires are really rich, and African GDPs are really small.

There’s also a conspicuous absence: the world’s richest man is nowhere to be seen on the map.  That’s because #3 richest Warren Buffett’s $73 billion net worth was a near perfect fit for Sudan’s $73.8 billion GDP, and the next country up—Morocco, at $110 billion—was too far out of Bill Gates’s league to compare the two.  You can see it on this chart:

Billionaire bar chart

But even without Gates, the top billionaires do quite well for themselves in Africa.

If the infamous Koch brothers pooled their wealth ($43 billion each), they could buy Sudan’s economy for a year and still have enough left over to rank in the top 100 billionaires.  If they choose to keep their fortunes separate, they’ll have to make due with Tunisia and Tanzania, which are much lovelier countries anyway.

Amazon founder Jeff Bezos gets all of Ghana’s gold, oil, and cocoa beans, and his Chinese counterpart Jack Ma gets Uganda’s coffee and fish.  Meanwhile casino magnate Sheldon Adelson can buy up everything Cameroon has to offer in a year.

Facebook is booming among young Africans, and its founders’ fortunes have grown bigger than the economies of most of the countries where these new Facebook users live.  Congo produces the lion’s share of the rare minerals that most of the world’s cell phones depend on, but Zuckerberg could buy up all of it, plus everything else Congo produces, for an entire year.  If he doesn’t want to bother with a security detail, he could camp out next door in safe and secure Rwanda with co-founder Dustin Moskovitz, whose $7.9 billion is just about equivalent to Rwanda’s $7.89 billion economy.  (But they’d better have good tax lawyers.  Rwanda charges a 30% tax on expats—which if levied against Zuckerberg’s and Moskovitz’s fortunes would bring in a one-time windfall of nearly double the country’s entire economy.)

africa billionaires - facebook

Some of the most recognizable names can be found out in West Africa.

Luke Skywalker’s home world of Tatooine was not filmed in Mauritania’s deserts, but it probably wasn’t due to the expense of filming rights: the wealth generated by George Lucas’s two film franchises is bigger than the country’s economy.  Richard Branson and Ralph Lauren don’t need to worry about ebola anymore—Sierra Leone and Guinea have recently been declared ebola-free.

africa billionaires - celebs

South African-born Elon Musk made his first fortune selling PayPal to Ebay, so it’s fitting that he and Ebay-founder Pierre Omidyar are neighbors in Mali and Niger.  What I like about these two is how they demonstrate the growth of the global renewable energy industry.  Much of Musk’s wealth nowadays is tied up in Tesla Motors and Solar City, two of the leaders of the clean economy, while Omidyar has invested in one of BBOXX’s competitors, Off-Grid Electric.  While these companies are still not as big as the global oil giants, it’s nice to see renewable energy starting to create country-sized fortunes.

Professional sports franchises are some of the most profitable businesses around, and to own one you need to be as rich as a small country in Africa, though not necessarily a well-off one.  Burundi and Malawi are perennially some of the world’s poorest countries: their economies are smaller than the bank accounts of just two Dallas sports team owners, Mark Cuban and Jerry Jones.  Swaziland is technically a middle-income country, but with only 1 million people, its economy is still smaller than the wealth of New England Patriots owner Robert Kraft.

africa billionaires - sports

Africa has billionaires too.  With a net worth of $15.4 billion, Africa’s richest man, Aliko Dangote, has a fortune roughly the size of Gabon’s oil-rich economy.  Gabon actually has one of Africa’s highest per capita GDPs (around $11,500 per head), though with a low population its total economy is still relatively small.

africa billionaires - africas richest

Finally, you’ll notice some colored-in countries that don’t have any billionaires’ names on them: for example, Lesotho, Eritrea, Liberia, and the big green country smack in the middle, Central African Republic.  Each of these countries has a nominal GDP of $2 billion or less.  At this level, the list of billionaires becomes so big that the Forbes’ site starts slowing down trying to load them all, and I got tired of scrolling through the list.  Sorry guys.

Considering all of this, there are two things that jump out at me.

  1. Billionaires are REALLY rich. The countries on this map are not, for the most part, small and sparsely-populated.  Ethiopia, Congo, Tanzania, and Kenya are all in the world’s 30 most populous countries (#13, #16, #24, and #29 respectively); taken together, the populations of all the countries with billionaires’ names on them total to 674 million.  But Oracle founder Larry Ellison’s wealth is so immense that you’d have to get all 92 million Ethiopians working for an entire year just to produce as much.  When you go to Mombasa port and see thousands of cargo containers stacked in huge piles, or drive for hours through the Ugandan countryside passing thousands of acres of coffee fields and tea plantations, alongside hundreds of trucks laden with produce, minerals, animals, and oil for an entire country, a single individual like Amancio Ortega or Jack Ma could buy all of it.  (Then again, two-thirds of the world’s countries have gross domestic products smaller than annual sales of the iPhone, so perhaps it’s not THAT surprising).
  1. The amount of aid or investment needed to build these countries’ economies is actually not that much. Though many Americans complain about how much of their tax money is going to foreign aid, it’s not so much that all those funds couldn’t be provided by a single person.  In fact, there are 34 individuals who could afford to provide the entire $22.3 billion requested for USAID in 2016—and #34 would still be left with $300 million.  That $300 million would get the company I work for halfway to our goal of electrifying 20 million households by 2020.  It can feel a little galling when you work so hard to raise $20 or $30 million to fund your company for a year, and there are individuals on this planet who could pull that cash out of their pockets!

And even when we start talking about truly big money – climate agreements, for instance, frequently cite a figure of $100 billion per year in clean energy investment that rich countries should transfer to poor ones – it’s still only Amancio Ortega plus one half of the Koch Brothers.

When you compare $100 billion to African economies, it sounds like a lot of money.  But when you compare it to the world’s richest, $100 billion just ain’t that much.

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2 responses to this post.

  1. Posted by david on April 28, 2016 at 4:14 am

    you’re comparing a stock to a flow.

    Here’s a primer:
    https://en.wikipedia.org/wiki/Stock_and_flow

    Reply

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