Kenya produced dollar millionaires at the highest rate in the world in President Uhuru Kenyatta’s first term, a new wealth survey shows.
The Knight Frank Wealth Report shows that the number of Kenyans worth more than $1 million (Sh113.8 million) increased by 263 per cent in the period between 2014 and 2019, the highest in a group of 43 countries.
This period coincides with President Kenyatta’s first term, which ran from 2013 to 2017.
It is a period in which a few Kenyans made a lot of money from the construction boom as the Jubilee government unveiled an array of projects from railways, roads and ports.
One of the key reasons for the growth in dollar millionaires, said a financial expert working with a local bank who sought anonymity as they are not authorised to speak to the press, is due to the rise in tenderpreneurs.
“In the first term, the Jubilee government started giving people tenders,” said the analyst, noting most of the dollar millionaires were in real estate and construction, which were the only sectors that grew over the period.
Another sector that might have given birth to dollar millionaires during this period is Information Communication and Technology (ICT), which attracted a lot of foreign capital.
Paul Mwai, the CEO of AIB Capital, an investment bank, argued that there might have been much growth after all.
“Most people were moving money to more visible assets like Treasury bonds,” said Mr Mwai.
When the Jubilee government came to power, it embarked on building megaprojects, which were financed through debts, including domestic loans.
Most of the loans were being offered at attractive rates, sometimes as high as 13 per cent and tax-free in the case of infrastructure bonds.
During this period under review, young entrepreneurs benefited from Access to Government Procurement Opportunities (AGPO) after the State came up with a programme that ring-fenced 30 per cent of tenders for the youth and women.
The construction boom, experts said, might have given birth to the emergence of the tenderpreneurs who benefited by chiefly supplying the government. The 2022 Knight Frank’s Wealth Report shows that close to a third of dollar millionaires, 803, were aged 40 years and below.
However, the Covid-19 pandemic significantly reduced the number of high-net-worth individuals (HNWIs) in 2020, with the size of the economy shrinking by 0.3 per cent.
Two years later, about 873 Kenyans fell off the dollar millionaires’ club and are yet to reclaim their status. The report classifies 3,362 Kenyans among the world’s HNWIs—those with a net worth of more than $1 million (Sh113 million)—by end of last year.
The latest number represents a 1.2 per cent rise from 3,323 in the previous year. In 2020, 912 Kenyans exited the dollar millionaires’ club.
However, another report by the Swiss-based financial conglomerate Credit Suisse showed that the number of super-rich Kenyans shot up to 27,473 in 2020.
The report showed that the percentage of adult Kenyans with over $1 million (Sh113.8 million) increased to 0.1 per cent as some individuals defied the Covid-19 odds to multiply their wealth amidst an economic downturn.