The Wealth Report: Kenya and East Africa ultra-wealthy trends

Kenya’s dollar millionaire population – also known as high net worth individuals – is set to growth by nearly three-quarters over the next decade, a trend that will be mirrored across East Africa, according to The Wealth Report 2015. The eighth edition of The Wealth Report, published annually by Knight Frank and sponsored in Kenya by CfC Stanbic Bank’s Wealth and Investment (formerly Private Clients), shows the population of Africa’s super-rich expanded to 1,932 in 2014.

The number of ultra-high net worth individuals in Africa – those with at least $30 million in assets – will increase by 59% over the next 10 years, faster than the 34% projected global growth. Ivory Coast and Tanzania are the two African states in the global top 10 list of countries predicted to grow their UHNWIs by 100% or more over the next decade. Kenya’s dollar millionaires are forecast to increase from 8,764 in 2014 to at least 15,249 in 2024, a 74% growth, according to research carried out by WealthInsight for The Wealth Report.

Kenya is the largest economy in East Africa. Its population of ultra-high net worth individuals is forecast to grow by 82% over the next decade to 209 in 2024. The country’s UHNWIs reached 115 in 2014. It has 32 individuals who have crossed the $100 million worth – centa-millionaires. “There’s a high concentration of wealth in Kenya because it’s a regional hub.,” said Ben Woodhams, the Knight Frank Kenya Managing Director. “Kenya’s ultra-wealthy have been investing in overseas property in the past and have now started focusing inwards, raising their stakes in the local property market. Real estate is the world’s primary investment of choice for the wealthy and Kenya is certainly no exception.”

The Wealth Report shows that of the $619 billion global commercial property investments made in 2014, private individuals channelled $153 billion into the asset class. In Africa, respondents to Attitudes Survey said their UHNWI clients have nearly a third (31%) of their investment portfolio under property.

While Kenya’s wealthy population is the highest in East Africa in absolute numbers, but Tanzania’s is set to record a faster increase in super-rich individuals, doubling from 78 in 2014 to 156 by 2024. Uganda also features in the list of top 100 countries predicted to grow their UHNWI numbers fast. Its UHNWIs will increase to 35 by 2024, a 67% growth from 21 in 2014. Uganda’s dollar millionaires population was 1,556 in 2014 and is set to increase to 2,523 by 2024.

Head of Wealth and Investment at CfC Stanbic Bank Anjali Harkoo said: “We have witnessed a growth in our ultra-high net worth business with demand for a broader wealth management solution. As a business we have evolved to meet this need and this week marks our official name change from Private Clients to Wealth and Investment. The change is a reflection of our shift in strategy to provide more holistic financial planning and advice-driven solutions in response to changes in the high-net worth market”

The Attitudes Survey established that among issues that UHNWIs believe could affect their wealth, lifestyle and business include family succession, with 85% of global respondents saying this was a major concern for their clients. Potential increase in wealth taxes and increased scrutiny of the wealthy by governments followed closely in the list with 81% and 80% respectively.

“The road to greater riches is not always simple, and the survey results highlight a number of issues that UHNWIs believe could hinder their ability to generate more wealth. Interestingly, it was not the global geopolitical and economic issues that tend to spook stock markets that were of the most concern, but more personal issues,” says Andrew Shirley, editor of The Wealth Report. The Attitudes Survey showed that Africa saw growth for most of its UHNWIs, with 89% of respondents in the continent saying their clients’ wealth increased in 2014. For 2015 outlook, 82% of respondents in Africa expect their clients’ wealth to increase this year.