About 356 billionaires were living in Kenya last year, placing the country at number four in a ranking of top African cities based on the super wealthy persons.
The Africa Wealth report for 2019 report published this month by Mauritius based AfrAsia Bank ranked South Africa top with 2,169 billionaires, Egypt (932) and Nigeria (531).
These individuals have net assets above $10 million (Sh1 billion).
The report says total wealth held by Kenyans increased 64 percent over the past decade, but reckon the riches took a knock last year following loss of nearly a fifth of the market value of the Nairobi Securities Exchange (NSE).
The bulk of the Kenya billionaires made their wealth from the manufacturing, real estate and technology sectors as the sluggish performance of the equities market in recent years reduce its power as the shortest route to riches.
Investors’ paper wealth in the Nairobi Securities Exchange-listed companies fell Sh419 billion last year, marking one of its worst performances in years.
Nairobi accounted for 73 percent of Kenya’s billionaires, reflecting the capital city’s economic dominance over the other 46 devolved units created in 2013 to address the wealth imbalance.
The heavy concentration of billionaires in Nairobi indicates inequality in the country’s economic development, which has partly been attributed to the previous centralised system of government which guided sharing of resources since independence.
The devolved system of government raised hopes of addressing the economic imbalance, but analysts say there is a need to offer incentives to attract private investors to counties.
“We expect Nairobi to break into the top five wealthiest cities in Africa soon possibly replacing Lagos which has been slipping down on the list,” says AfrAsia Bank.
While Kenya is ranked fourth in the ranking of billionaires, Nairobi is placed fifth in cities grading because Johannesburg and Cape Town at number one and two are both in South Africa.
The study describes wealth as the net assets of a person that includes all assets like property, cash, equities, business interests less any liabilities.
The firm reckons that it uses its asset management arm and responses from private bankers as well as wealth advisers and managers to track the billionaires.
This suggests that it does not capture super-rich people with no links to formal wealth managers.
“Kenya had a difficult 2018, which saw Kenyan wealth down by around ten percent during the year as the local stock market lost significant value,” says the report.
“However, if one looks over the long-term trend there is still quite positive with wealth growth of 64 percent over the past ten years.”
The AfrAsia Bank report does not name individuals but other wealth reports have in the past singled out President Uhuru Kenyatta’s family, retired president Daniel arap Moi’s family and the late Cabinet minister Nicholas Biwott among Kenya’s wealthiest.
Business tycoons who have appeared in past wealth reports include Vimal Shah, Chris Kirubi and Manu Chandaria.
Previous wealth surveys on Kenya have shown strong linkages between politics and wealth accumulation.
Kenya was top in eastern Africa. Ethiopia had 154 billionaires, Tanzania (99), Uganda (67) and Rwanda (30).
Hard economic times
Kenya’s higher share of billionaires is not in tandem with the relatively hard economic times the country has experienced in the past three years and the resulting fall in corporate profits that has seen thousands of people lose their jobs.
Over the three years, Kenya has elevated political uncertainties following a bruising presidential contest that put on hold many investment decisions and poor weather that has hell back farming —which accounts for a third of the country’s gross domestic product (GDP).
The Kenyan economy expanded by 6.3 percent last year compared to 4.9 percent in 2017 but the drought is forecast to cut it to 5.7 percent this year.
AfrAsia Bank reckons the significant share of Kenya’s super-wealthy has attracted dealers in luxury brands including car dealers, hotels and fashion products.
The reports say sales in luxury products doubled in Nairobi over the past ten years to Sh62.2 billion in annual revenues, the largest jump compared to cities Nigeria, Morocco and Egypt.
Some of the global luxury brands that have a presence in Nairobi include German’s Volkswagen’s luxury sports-car brand Porsche, its peer German automaker Daimler AG and British manufacturer and marketer of luxury cars and SUVs Bentley Motors Limited.