Getting rich: Understanding Kenya’s wealth distribution after independence

By XN Iraki

It is possible to identify Kenya’s affluent groups in the last 100 years by their sources of wealth and then predict without the hindsight of a prophet who will join Kenya’s next affluent club, and what it will take to join it.

Our fast journey through the last hundred years, will start from the Happy Valley and end in the cyberspace.

Kenya’s first generation of affluent and wealthy was made of Britons, who came to Kenya seeking wealth and adventure. They found "empty land" which they easily occupied by replacing the traditional legal system with their own.

Superior weaponry was a factor in their acquisition of land. They already knew the value of land and had technology to exploit it, very much unlike the peasants who subdivided that land after independence in 1963 into uneconomical pieces.

Were these Britons (and others) affluent? They made profits, and had time to engage in the excesses of the happy valley. They built magnificent houses, which should be acquired by the national museums, constructed airstrips and golf courses. Their affluence has made many ask if we were really progressing.

However, it would be incorrect to argue that Kenya had no wealthy and affluent people before Britons came. We had our wealth in terms of land, livestock, and some traditionalists would even include wives to the list. Britons only gave us a new perspective to what is to be affluent.

The first generation of the affluent, using the modern perspective, made their money the old fashioned way, from land, exploiting it. Keen observers will note that these pioneers are still with us. Independence merely forced them to sell land and re-invested their money in alternative investment vehicles. They live among us disguised as tourists. Some retreated into marginal areas where there is less competition for land.

Second generation

The 1963 independence spawned the second generation of the wealthy. They had learned the skills of wealth acquisition from colonists through education. A select few had twin advantage of education and access to political power, which they easily got after independence. Many in this generation made their money through rent seeking, not entrepreneurship, because of their access to state power and lack of competition. They were further aided in their pursuit of wealth by the command economy, which left few avenues to make money except your proximity to state. Even in politics, they had virtual monopoly.

This generation had the hindsight of setting up "private land banks." They are making lots of money today either by selling this land or developing it. With high population growth, they did not gamble. Some observers could call this second generation of the wealthy Kenyans the ‘robber barons’.

This generation transcended a regime change in 1978, getting co-opted, trading off their ambition for power for continued opportunity to accumulate wealth. This generation might be the luckiest generation in Kenya’s history.

They still wield power today buttressed on their wealth. Like their colonial predecessors, they are secluded making appearing during election time. They may have their own Happy Valleys, which I leave it to you to name.

This generation was lucky again as they took advantage of the State’s privatisation drive in the 1990s. With access to power and accumulated wealth, they easily acquired former state assets, And it does not matter if it was through the stock exchange. How many "small people" were bothered about the stock exchange till the Safaricom blitz? Kenya’s shift to market system was very much like Russia’s pioneered by the late Yegor Gaidar’s shock therapy, which tried to turn a command economy into a market system overnight and ended up spawning the oligarchs. I leave it to you to name our oligarchs.

Cold war

This generation’s grip on power and wealth was threatened in 1990s after the end of cold war. They reacted in unexpected ways. Kanu, their powerbase for example gave out almost every available land when it became evidence they could lose power in 1992. It was argued crudely that an "elephant does not die with its tusks." They went farther and raided state coffers leading to

Goldenberg, whose aftermath still haunts us today.

In the same year 1992, the first politically instigated land clashes occurred. This was a defining moment, as it marked the end of "easy land’, no wonder forests were excise after that as this generation tried all the tricks to stay in power, both economic and political. They used land as the bait to hit against their political enemies; they knew the position land holds in our national psyche.

Mau forest settlements are echoes of this generation, which had been joined by new comers who never benefited from post independent land deals, but wanted a piece of action.

Enough digression, who will belong to the third and fourth waves, the next two generations of the wealthy and affluent? Find our next week

The writer is a lecturer at the University of Nairobi, School of Business. [email protected]