The number of super-rich Kenyans jumped to 27,473 last year even as the Covid-19 pandemic widened the gap between the rich and the poor, according to a new wealth report.
Report from Switzerland-based financial conglomerate Credit Suisse shows percentage of adult Kenyans with more than $ 1 million (Sh108 million) rose to 0.1% as some people defied chances of Covid-19 to multiply their wealth in the midst of an economic downturn.
Kenya’s multimillionaire fraction ($ 1 million and over) was not included in the 2019 report because it was less than 0.1%.
This means that the number of super rich Kenyans has increased at a time when two million Kenyans were plunged into poverty, according to a World Bank report, which attributes the increase in misery to the adverse effects of Covid-19.
The Global Wealth Report 2021 estimated Kenya‘s adult population last year at 27.47 million, with almost everyone (98%) valued at less than Sh100,000.
The rise in the number of high net worth individuals (HNWIs) has occurred despite a bearish stock market which has seen Nairobi Securities Exchange (NSE) investors lose billions of shillings in paper wealth.
Kenya was among the countries where stock prices fell more than 10 percent. Other countries that saw declines included Israel, Spain, Singapore, Greece, Austria, Chile, Egypt and Colombia.
“Serious pandemic upheaval and post-Brexit uncertainty are not an attractive combination for investors,” the report reads in part.
Stock prices on the NSE, the report said, fell 15.5% as the stock market rocked by a pandemic that temporarily suspended trading on the exchange.
The wealthy appear to have moved most of their wealth into safe assets such as treasury bills and US dollar-denominated assets where their money has risen even as Covid-19 decimated lives and livelihoods.
The number of HNWIs in the report, however, is in stark contrast to that which was done jointly by Knight Frank and Stanbic Bank. This Knight Frank-Stanbic Bank report estimated that there were only 3,323 Kenyans worth $ 1 million and more, down 21.5% from 4,235 in 2019.
The report shows that most of the country’s super-rich have invested their wealth in real estate, with a few hidden in government securities.
Among the African countries surveyed, Kenya had the third highest number of HNWIs behind South Africa and Egypt, according to the Global Wealth Report 2021.
However, the gap between the haves and have-nots has widened with the Gini coefficient, an index that measures the inequality of a society (zero percent indicates perfect equality while 100 percent the worst inequality) deteriorates to 82.2% from 74.5 last year. In 2019, there were 228,456 Kenyans valued between 10-107 million shillings ($ 100,000-1 million).
This figure rose to 412,095. Africa’s richest economy, Nigeria, is not listed because the HNWI fraction is less than 0.1 percent.
Many Kenyans lost their jobs in 2020 after the state put in place health and safety protocols aimed at curbing the spread of Covid-19. According to the report, Switzerland has the highest percentage of wealthy individuals with 14.9% of the adult population worth over 108 million shillings.
Slovakia is a country where the gap between rich and poor is not large with a Gini coefficient of 50.9%. It is followed by Iceland, 50.9 percent. The Bahamas, a leading tax haven, is the most unequal society with a Gini coefficient of 91.4%.
The rate at which Kenya struck millionaires between 2014 and 2019 was the fastest in the world, the Knight Frank Wealth Report showed. They increased by 263% between 2014 and 2019, even beating China.