Kenya’s population of individuals worth at least US$5 million (approx. Sh.500 million) in net assets rose to 1,290 in 2017, a 16.2% increase from 1,110 in 2016, according to data provided by Wealth-X for the Knight Frank Wealth Report 2018.
Out of the 1,290 individuals, 90 are worth US$50 million (Sh.5 billion) or more. However, Kenya has less than 10 individuals worth US$500 million (Sh.50 billion) or more.
The number of Kenya’s dollar millionaires worth at least US$5 million is expected to grow by 60.5% over the next five years to 2,070 in 2022, which will be the second fastest growth in Africa behind Nigeria’s 74% to 6,500 individuals.
Africa had a total of 22,970 individuals in the US$5m plus wealth band in 2017, which was a 7% increase over 2016. The continent had a total of 1,190 individuals worth at least US$50 million, holding total wealth estimated at US$245 billion.
In Africa, South Africa has the highest number of individuals with assets valued at US$5 million or more, followed by Egypt with 4,180. Nigeria has 3,730 individuals in this wealth bracket, Tanzania 250, Zambia 140, while Uganda has less than 100.
According to The Wealth Report’s Attitudes Survey, 43% of respondents from Kenya said their clients’ wealth increased in the 12 months to December, with a similar percentage saying it decreased. 14% of the respondents said their clients’ wealth remained unchanged in 2017.
The majority of respondents (67%) attributed the impact on their clients’ wealth in the year to political conditions, while 56% said local economic conditions impacted on wealth; 44% said performance of their clients’ businesses impacted on their wealth, with a further 39% citing performance of non-property investments.
The majority of wealth advisors in Kenya (81%) expect their clients’ wealth to increase in 2018, with only 5% anticipating a decline. The increase in wealth is largely attributed to improved political and economic conditions in the country, as well as performance of property investments and high-net-worth-individuals’ (HNWIs) personal businesses.
Ben Woodhams, Managing Director at Knight Frank Kenya, said: “This expectation of increased wealth underlines the confidence that Kenyan HNWIs have in the future economic performance of the country.”
The top sectors generating wealth for Kenyans are retail businesses (18%); finance, banking and investment (18%); industrial businesses (8%); and manufacturing (6%). The majority of Kenya’s affluent are self-made (56%), 5% have inherited, while 39% have made wealth both from inheritance and their own enterprises.
The Attitudes Survey, which collated responses of 500 of the world’s leading private bankers and wealth advisors, consistently showed that passing wealth to the next generation remains a major concern for the wealthy globally.
Andrew Shirley, Editor of The Wealth Report, said: “Fear that their children will fritter their inheritance away, the worry that passing on too much too soon will dampen their offspring’s entrepreneurial spirit, or simply concerns about how to treat siblings fairly—all weigh on their minds.”
Indeed, most Kenyan HNWIs have yet to put robust succession plans in place, with only 40% of respondents to the Attitudes Survey in the affirmative. This is the lowest percentage of succession preparedness worldwide, against a high of 65% in the US, global average of 53% and Africa’s 47%.