Ten Kenyans cumulatively control assets worth more than Sh500 billion, according to a report that highlights the number of the country’s ultra-rich.
The annual wealth report by Knight Frank shows that another 10 Kenyans joined the exclusive league of individuals whose assets are valued at more than Sh5 billion last year, raising the number of these rich Kenyans to 90.
Despite a prolonged electioneering period, reduced credit to the private sector, and a crippling drought, 180 new individuals last year joined the exclusive dollar millionaire club and are estimated to be worth more than Sh500 million.
The number of Kenyans worth more than Sh500 million now stands at 1,290, representing a 16 per cent jump from the previous year.
The report once again casts the spotlight on the widening gap between the country’s rich and poor.
Kenya has in the past been ranked among the top 10 most unequal countries in sub-Saharan Africa, with one report placing the country sixth in the prevalence of extreme poverty.
Early this year, UK-based charity Oxfam reported that about 8,300, or less than 0.1 per cent of Kenya’s population, owns more wealth than the bottom 99.9 per cent.
Oxfam recommended the introduction of wealth taxes for the ultra-rich as one of the measures to address the inequality.
South Africa leads the continent in the number of high-net-worth individuals, with 500 individuals valued at more than Sh5 billion and 30 individuals cumulatively valued at over Sh15 trillion.
No succession plans
Kenya far outpaces her East African neighbours in the number of dollar millionaires and billionaires, with the numbers expected to rise over the next five years.
Tanzania recorded 250 individuals worth more than Sh5 billion and less than 20 valued at more than Sh50 billion. Uganda was reported to have less than 100 and 20 individuals respectively in both classes.
Overall, more than half of the high-net-worth individuals (57 per cent) in Africa reported having increased their wealth compared to less than a third (27) whose wealth decreased.
The report collects data through interviewing fund managers and wealth advisers who manage the assets of high-net-worth individuals across the country.
Majority of those interviewed reported terrorism, populism, cybercrime, Brexit, and the Trump presidency as some of the issues having a negative impact on their clients.
“In terms of fiscal policy, changes in corporation tax and capital gains tax have the largest impact on ultra-wealthy populations, although it can take some time for the changes to be felt,” explained Winston Chesterfield, director of custom research at Wealth-X.
Mr Chesterfield explained that a change in political leadership, such as the recent leadership change in South Africa that saw Cyril Ramaphosa installed as the country’s president, is expected to affect ultra-wealthy populations.
High-net-worth individuals in Kenya further emerged as the least prepared in creating succession plans for future generations.
The reluctance of individuals to develop succession plans was attributed to fear that future descendants would waste the wealth or lose their entrepreneurial spirit if left too much money too early.
This could explain the high occurrence of legal disputes involving inheritance that are often witnessed with the death of wealthy individuals.