Kenyans richer but Tanzania home to more millionaires

Kenya might be the largest economy in the region but Tanzania is home to the most dollar millionaires.

A new report shows the number of the super-rich in Tanzania far supersedes that of Kenya, which enjoys superior economic standards measured by gross domestic product (GDP).

A recent wealth report by Knight Frank shows the tally of Tanzania’s super-rich stood at 5,668 at the end of 2019 compared to Kenya’s 2,942.

This includes 5,553 who are dollar millionaires - worth Sh100 million and above, another 114 billionaires, worth Sh3 billion and above and one that is worth over Sh100 billion.

Kenya has 2,900 dollar millionaires, 42 individuals worth $30 million and above and none in the category of dollar-billionaire, according to the 2020 Wealth Report by property management firm Knight Frank.

Even as Tanzania has churned out more millionaires, Nairobi has continued to stretch its lead as the region’s largest economy with the latest data from the International Monetary Fund (IMF).

With a per capita income of $957 (Sh90,570) as of 2018, Tanzania is classified by the World Bank as a poor country. However, Kenya with a per capita income of $1202 (Sh120,200) is categorised as low middle income country.

Uganda has 137 individuals worth over Sh100 million, five who are worth Sh3 billion and above and no one worth Sh100 billion.

Kenya, which has had a perfect run growing its dollar-millionaires (those worth Sh100 million and above) by 263 per cent in five years from 2014, however experienced a slowdown last year.

A tough economic environment saw six Kenyans drop out of the billionaires club (those with assets valued at Sh3 billion and above), the report showed.

High net worth individuals- those worth Sh100 million and above- also reduced during this period by 499 from 3,399 in 2018.

Knight Frank Kenya Managing Director Ben Woodhams attributed the fall in the wealth value to the tough economic climate witnessed in 2019. “The economic downturn saw their assets lose value and consequently fall out of those categories,” he told Sunday Standard after the release of the wealth report in Nairobi last week. The biggest increases in investments for the super-wealthy were in equity investments through the stock market and in private equity investments.

Forays into Kenya

In 2019, the benchmark index for the 20 best performing counters at the Nairobi Securities Exchange, dropped by 6.3 per cent compared to the previous year perhaps explaining where some of them lost their wealth.

Tanzanian billionaires have been making forays into Kenya. In 2018, Tanzanian billionaires Aunali and Sajjad Rajabali were reported to have bought seven million shares of Equity Group worth Sh344 million, pushing their investments in Kenyan firms listed at the NSE to Sh1.5 billion.

Some of the NSE-listed firms that the duo has put their money in include Co-op Bank, KenolKobil, Jubilee Holdings and I&M Holdings.

In 2016, Bank M became the first Tanzanian lender to enter Kenya after it acquired a 51 per cent stake in Oriental Commercial Bank.

Besides Kenya and Tanzania, other African countries that were spotlighted in the report are Botswana, Malawi, Nigeria, Rwanda, South Africa, Uganda, Zambia, and Zimbabwe.

South Africa has the most multi-millionaires on the continent, 88,460 followed by Nigeria which has 40,869 super rich individuals.

There are only 22 dollar-billionaires (Sh100 billion and above) on the continent, having reduced from 30 in 2014. The report does not given reason for the drop in dollar billionaires, however, it is possible that the drop in commodity prices which has hit hard South Africa, home of the continent’s dollar billionaires, is partly to blame.

South Africa has the most dollar billionaires, six, followed by Nigeria, with 4.

Kenya’s number of multi-millionaires has increased exponentially over the last five years to 2019. Indeed, the rate at which Kenya minted millionaires between 2014 and 2019 was the fastest in the world, according to the report.

The number of individuals worth Sh100 million and above increased by 263 per cent from 800 six years ago to 2,900 in 2019. 

Kenya’s rate was higher than China’s, the world’s second largest economy and which during the period enjoyed faster economic growth than Kenya.

The increase has been witnessed despite a dire situation in the economy. National Treasury estimates the economy to have expanded by 5.6 per cent last year, a slow-down compared to 6.3 per cent in 2018.

Ironically, some Kenyans suddenly found themselves super-rich, with the number of dollar millionaires growing from a low of 800 in 2014 to a high of 3,360 in 2018 before it tapered off to 2,900.

Various reasons can be attributed to the drop, key among them the revaluation of investments and crackdown on corrupt individuals.

The finding by Knight Frank shows the 263 per cent growth in the number of dollar-millionaires during the period was by far the fastest in the world, even as majority of Kenyans struggled to put food on the table.