High Profile Scandals Creating Overnight Millionaires in Kenya as Taxpayers Suffer

A new edition of the Global Wealth Report by the Swiss investment bank, Credit Suisse has revealed that despite being weighed down by debts, Kenya keeps churning out millionaires.

The report noted that every adult in the country has a debt load of 523 US dollars making it the most indebted country in East Africa.

The report further stated that Kenya registered high-profile government scandals including misappropriation of borrowed funds, which has created overnight millionaires. This has cost the taxpayers about 30 percent of the national budget — translating into 2 billion shillings (USD 18.34 million) per day.

In 2020, the number of Kenyans with a net worth of at least USD 30 million, including their primary residence, stood at 90. The number was a decline from the 2019 figures where these individuals were 106. The drop was attributed to the COVID-19 pandemic, noted a Knight Frank Wealth report.

After Nigeria, South Africa, and Egypt, Kenya follows in countries with the highest number of wealthy people in the African continent.

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Data from the Credit Suisse report indicates that despite being overwhelmed by debts estimated at over 7 trillion shillings (USD 64.22 billion), Kenya is the richest in the region with total wealth estimated at USD 338 billion (both financial and non-financial wealth) as of last year.

Putting these numbers in perspective translates into wealth per adult of USD 12,313 (approximately 1.4 million shillings) and an average wealth per adult of USD 3,683 (approximately 405,130 shillings).

Following Kenya is Rwanda with a wealth per adult standing at USD 4,188; Tanzania, USD 3,647; Uganda, USD 1,994; Democratic Republic of Congo, USD 1,240; and Burundi with USD 728.

According to the researchers at Credit Suisse, Kenya’s wealth rose significantly over the past decade hitting a high of 560 billion US dollars in 2020 from a low of 24 billion US dollars in 2000.

Compared to Kenya, every adult in Tanzania carries a debt load of USD 137, followed by Rwanda with USD 135, Uganda with USD 107, Burundi with USD 37, and the Democratic Republic of Congo at 36 US dollars.

DR Congo has an estimated 39.74 million adults, followed by Tanzania (27.74 million), Kenya (27.47 million), Uganda (19.83 million), Rwanda (6.58 million), and Burundi (5.38 million).

The whole African continent had an estimated wealth per adult of USD 7,922 in 2020, with debt per adult at USD 552 in the same period.

The total wealth barely changed in the continent, with exchange rate appreciation accounting for the slight change in wealth in the continent.

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Meanwhile, the total global wealth rose by 7.4 percent in 2020 and the wealth per adult grew by 6 percent to USD 79,952. The countries most affected by the pandemic did not fare badly in terms of wealth creation.

“Wealth creation in 2020 was largely immune to the challenges facing the world due to the actions taken by governments and central banks to mitigate the economic impact of Covid-19,” said the report.