advertisement

Economy

8,300 super-wealthy control two-thirds of Kenya’s economy

Equity Bank CEO James Mwangi is ranked among the 16 enterprising individuals classified as centimillionaires in the New World Wealth report. FILE
Equity Bank CEO James Mwangi is ranked among the 16 enterprising individuals classified as centimillionaires in the New World Wealth report. FILE 

Nearly two-thirds of Kenya’s Sh4.3 trillion ($50 billion) economy is controlled by a tiny clique of 8,300 super-wealthy individuals, the report by New World Wealth shows.

The group of dollar millionaires is on average worth Sh7.1 billion ($83 million) each, highlighting the huge inequality between the rich and the poor.

The survey, which was conducted over a span of five years, paints a grim picture of wealth distribution in Kenya where 46 per cent of the country’s 43.1 million people live below the poverty line, surviving on less than Sh172 ($2) a day.

“Kenya’s high networth individuals (HNWIs) outperformed the worldwide HNWI average during the review period, with Kenyan HNWI numbers increasing by 24 per cent whilst worldwide HNWI volumes declined by 0.3 per cent,” says the report.

“The growth was positively influenced by rising commodity prices and business growth particularly in the construction, real estate, telecoms, banking and transport and logistics sectors.”

A small group of 105 of these super-rich Kenyans own about a fifth of the country’s gross domestic product (GDP), with each of them laying claim to about $93 million on average.

Industrialist Vimal Shah, the CEO of edible oils manufacturer Bidco, is listed as Kenya’s only dollar billionaire (worth over Sh86 billion), while about 16 others are grouped among centi-millionaires (worth between $100 million and $999.9 million) and 88 are described as affluent millionaires (worth between $30million to $99.9 million).

This small group of the super-wealthy who drive top-of-the-range cars and own million-dollar properties abroad reflect a stark difference from the majority of Kenyans who are struggling to make ends meet, faced by an unprecedented rise in the cost of basic consumables.

The World Bank in October said Kenya’s poverty levels are likely to stand at 30 per cent of the population in 2030, citing historical growth of the gross national product per person. Over the years, Kenya has instituted measures hoping to bridge this gap.

The latest stop-gap measure has been the implementation of a devolved governance system which is hoped will hasten the trickle-down of economic and social empowerment of the population.

Other programmes are the Constituency Development Fund (CDF) introduced about a decade ago also to spur development across the country, while creating new jobs.

However, the unemployment rate has perennially remained in the double-digits, a problem worsened by over a half a million fresh graduates exiting universities annually.

The World Economic Forum (WEF) recently noted that “the chronic gap between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade.”

WEF, and other international organisations, have on a number occasions stated that extreme economic disparities within populations pose a great risk to their stability.

Joblessness, lack of opportunities and poor pay cause citizens to get increasingly disgruntled as the costs of living rise to unprecedented levels.

Last month, Oxfam International released a report which revealed that about almost half of the world’s wealth is held by just one per cent of the population. 

“This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems,” the Oxfam report noted in part.

“Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown.”

The Wealth in Kenya report projects that the number of super-wealthy Kenyans will only but increase in the coming years.

By 2017, the report says the number of Kenya’s HNWIs will have grown 28 per cent to 10,700.

advertisement