An estimated 306 Kenyans rose to the rank of dollar millionaires last year, defying economic headwinds to grow their net worth above Sh100 million excluding their primary residences.
The 2019 Knight Frank’s Wealth Report also classified 9,482 Kenyans among the world’s High Net-Worth Individuals (HNWIs) in 2018, representing a three percent growth over the 2017 count.
Four Kenyans joined an elite group of super-wealthy persons called Ultra High Net-Worth Individuals (UHNWI) with a net worth of more than Sh3 billion, swelling their number to 125.
The Knight Frank report set to be released today projects that the number of wealthy Kenyans worth at least Sh100 million is set to grow further by 24 per cent over the next five years to 11,584 in 2023, as the super-rich continue to accumulate wealth.
“The forecast growth in ultra-wealthy people chimes with the findings of this year’s Attitudes Survey, which shows that the majority of UHNWIs expect their wealth to increase in 2019.”
Manufacturing, real estate and technology sectors were the biggest contributors to the number of new dollar millionaires.
Nairobi, the capital, is home to 82 of Kenya’s UHNWIs, with one of the fastest growth rate in the number of the super-rich in Africa.
“In Africa, Kenya leads the way, with 24 percent forecast growth by the end of 2023. This fits with more upbeat economic forecasts for Kenyan GDP in the coming years, yet risks remain to this economic outlook as the government looks to narrow its fiscal deficit,” the wealth report says. "The number of ultra-wealthy people in the country is set to reach 155 in 2023, making up six percent of the total UHNWIs population in Africa."
The Knight Frank 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 reports on Kenya have shown strong linkages between politics and wealth accumulation.
In the rest of East Africa, Uganda created 33 new dollar millionaires last year to take its total to 1,639 while 187 Tanzanians entered the club of dollar millionaires, taking the country’s total to 7,616. Kenya, however, still lags far behind South Africa which added 1,816 individuals to the club of dollar millionaires to mint 52,926 new HNWIs.
Kenya’s higher rate of minting multi-millionaires 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. The economy last year however recovered from 2017’s twin shocks of biting drought in the first half of the year, which hit farming activities hardest; and elevated political uncertainties following a bruising presidential contest that put on hold many investment decisions.
The gross domestic product (GDP) is estimated to have grown by about 5.8 percent last year, from about 4.9 percent in 2017. The latest wealth report findings are, however, in line with other surveys that have predicted a rise in growth of Kenya’s economy next year, underpinned by solid domestic demand and strong capital inflows.
Washington-headquartered Frontier Strategy is projecting the highest growth for Kenya in 2019 at 6.8 percent. The forecast is followed by New York-based brokerage house Citigroup Global Markets and France’s lender PNB Paribas at 6.1 and 6.0 percent, respectively. London-headquartered Euromonitor International sees the economy expanding by 5.9 percent, while UK’s HSBC predicts a six percent growth while Economist Intelligence Unit project a 5.8 percent growth. Others are JPMorgan (5.7 percent), France-based credit insurer Euler Hermes (5.7 percent, Oxford Economics (5.6 percent), Standard Chartered (5.6 percent) Fitch Solutions (5.2 percent) and consultancy firm Capital Economics of UK (5.5 per cent).
A higher growth means increased economic activities, an opportunity to create more wealth and job opportunities for the rising population of unemployed graduate youth as well as an increase in revenue collection for the government.
The Knight Frank Wealth survey was based on responses provided in October and November 2018 by 600 private bankers and wealth advisers who between them manage over $3 trillion of wealth for UHNWI clients.
The report predicts that investors will this year increase their exposure to education facilities, student housing and “last mile” logistics property, as well as targeting office investment in key tech and innovation markets.
Besides, the report’s Attitude Survey indicated that challenges posed by the local political and economic environment remained of great concern to dollar millionaires as they made it more difficult for them to create and retain wealth in the future.