Retail Businesses, Finance, Banking & Investment Among Top Sectors Generating Wealth for Kenyans

The top sectors generating wealth for Kenyans are retail businesses, finance, banking and investment, industrial businesses, and manufacturing.

According to the Knight Frank Wealth Report 2018, retail businesses account for 18 percent; finance, banking and investment at 18 percent; industrial businesses at 8 percent; and manufacturing at 6 percent.

The majority of Kenya’s affluent are self-made (56 percent), 5 percent have inherited, while 39 percent 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 percent of respondents to the Attitudes Survey in the affirmative. This is the lowest percentage of succession preparedness worldwide, against a high of 65 percent in the US, the global average of 53 percent and Africa’s 47 percent.

“This highlights the scale of the issue (succession planning concerns) and helps to explain why private banks and wealth advisers are putting so much effort into helping their clients with succession planning,” the report states.

On education, 49 percent of the respondents from Kenya said their clients send their children overseas for education. The majority of wealth advisors (67 percent) expect the percentage to increase.

Wealth managers and advisors said 18 percent of Kenyan HNWIs already have a second passport or dual nationality, which is lower than the global (34 percent) and Africa (28 percent) scores. Only 16 percent are considering to acquire second passports or dual nationalities—but even this is still lower than the Africa average (27 percent) and global (29 percent).

The low percentage is explained by the insight that most Kenyan HNWIs do not intend to emigrate permanently to other countries, with only 6 percent of wealth advisors affirming this compared to 21 percent globally and 19 percent in Africa.

This reflects well on their confidence in the country’s economic future.

Nonetheless, Kenyan HNWIs considering to emigrate prefer the US (42 percent), Canada (32 percent), UK (26 percent), Australia (21 percent), South Africa (11 percent), and 5 percent to France, Germany, India, Netherlands and Sweden.

At least 3 percent of HNWIs in Africa would consider emigrating to Kenya.

On philanthropy, Kenyan HNWIs are most likely to support causes in education and environmental issues (50 percent), job creation/training (39 percent), disaster/relief emergencies (28 percent), social issues (equality/human rights) and healthcare/disease control (17 percent).

Education is the top preference globally at 54 percent and 58 percent in Africa. Most wealth managers (83 percent) feel that their Kenyan clients’ philanthropic activities are increasing.