The number of super-rich Kenyans rose to 27,473 last year, even though the Covid-19 pandemic widened the gap between rich and poor, a new wealth report shows.
The report from Switzerland-based financial conglomerate Credit Suisse shows that the percentage of adult Kenyans at over $ 1 million (108 million shredders) has risen to 0.1 percent as some individuals defied the odds of Covid-19, her To multiply wealth in the midst of an economic downturn.
The proportion of Kenya‘s multimillionaires ($ 1 million or more) was not mentioned in the 2019 report, as it was less than 0.1 percent.
This means the number of super-rich Kenyans has increased at a time when two million Kenyans had plunged into poverty, according to a World Bank report that attributed the rise in poverty to the negative effects of Covid-19.
The 2021 Global Wealth Report estimated Kenya’s adult population at 27.47 million last year, with nearly each (98 percent) estimated to be less than Sh100,000.
The rise in the number of high net worth individuals (HNWIs) came despite a declining stock market that saw Nairobi Securities Exchange (NSE) investors shed billions of shillings in paper assets.
Kenya was among those countries where stock prices fell more than 10 percent. Other countries that saw a decline are Israel, Spain, Singapore, Greece, Austria, Chile, Egypt and Colombia.
“Severe pandemic upheavals and uncertainty after Brexit are not an attractive combination for investors,” the report says in part.
Share prices on the NSE fell 15.5 percent, according to the report, as the stock market was rocked by a pandemic that temporarily suspended trading on the stock exchange.
The rich appear to have invested most of their wealth in secure assets like government bonds and US dollar denominated assets, where their money grew, even as Covid-19 decimated lives and livelihoods.
The number of HNWIs in the report, however, is in stark contrast to what Knight Frank and Stanbic Bank carried out jointly. This report by Knight Frank-Stanbic Bank estimates there were only 3,323 Kenyans valued at $ 1 million and more, a 21.5 percent decrease 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 in government bonds.
Among the African countries studied, Kenya had the third highest number of HNWIs after South Africa and Egypt, according to the Global Wealth Report 2021.
However, the gap between the haves and the haves widened with the Gini coefficient, an index that measures the inequality of a society (zero percent means perfect equality, while 100 percent means the worst inequality) and went from 74.5 percent to 82, 2 percent deteriorated the previous year. In 2019 there were 228,456 Kenyans valued at between Sh10 million and Sh107 million ($ 100,000-1 million).
This has risen to 412,095. Africa’s richest economy, Nigeria, is not included because the proportion of HNWIs is below 0.1 percent.
Many Kenyans lost their jobs in 2020 after the state put in place safety and health protocols to contain the spread of Covid-19. According to the report, Switzerland has the highest proportion of wealthy private individuals with 14.9 percent of the adult population valued at over Sh108 million.
Slovakia is a country where the gap between rich and poor is not great, with a Gini coefficient of 50.9 percent. Iceland follows with 50.9 percent. The Bahamas, a prominent tax haven, is the most unequal society with a Gini coefficient of 91.4 percent.
The rate at which Kenya minted millionaires between 2014 and 2019 was the fastest in the world, according to Knight Frank’s wealth report. They rose 263 percent between 2014 and 2019, even surpassing China.