Africa’s rich elite are spread across 10 countries including in Kenya and Tanzania. Photos/FILE/TEA GRAPHIC
Nation Media Group
By JOINT REPORT, The EastAfrican
In Summary
- Ranking by Nigeria-based Ventures Magazine and the combined worth of the 55 billionaires highlights the growing gap between the rich and the poor in the region.
- While the region’s economies have been growing, the benefits were skewed in favour of a small fraction of the population.
- The $143.8 billion combined fortune of the 55 richest individuals is 3.5 times more than the combined annual budget for the five EAC countries. The five states together allocated $40 billion for spending in the current financial year that started in July.
The report has raised some important issues
about who is benefiting from African economic growth and is likely to
reignite debate about inequality across the continent. The World Bank
estimates that the number of Africans living below the poverty line –
measured as $1.25 per day – had fallen significantly because of strong
economic growth, dropping to 48.5 per cent in 2010, down from 58 per
cent in 1999.
However, the overall numbers, because of
population increases, are still up. At the same time, the number of
those living on $10-$20 a day — which economists call a “consumer class”
or “working class” — has increased substantially over the past decade.
An Afrobarometer survey, which polled more than
50,000 people in 34 African countries, suggested that much of the recent
strong economic growth in Africa is only benefiting a small elite.
“Despite high reported growth rates, poverty at the grassroots remains little changed,” the authors of the survey said.
“In fact, income inequality may be worsening.”
This view was backed by UNDP in its Human Development Index for 2013, in
which it said that while most regions across Africa show declining
inequality in health and education they do show “rising inequality in
income.” However, official statistics do reflect a small improvement,
with the emergence of a tiny middle class across Africa.
By Paul Redfern and Jeff Otieno
“For the first time since Independence, sustainable development
appears possible for East Africa, even for countries that started off
from very difficult positions,” he said.
Another respected African economist Paul Collier,
director of the Centre for the Study of African Economies at the
University of Oxford, says that Rwanda in particular has achieved what
no other country in Africa has achieved in recent times, “the hat-trick
of high growth, significant poverty reduction and reduced inequality.”
However, these experts also say that making it to
the middle-income station is not the end of the journey. Most economic
challenges will remain, including fighting poverty. At an annual income
of $1,000 the average East African would only “earn” $83 per month, or
less than $3 per day.
Their findings are backed by the IMF, which says
that Ethiopia, Mozambique, Tanzania and Zambia should be among the 10
fastest growing economies in the world between now and 2015. But the IMF
also notes that the region includes some of sub-Saharan Africa’s
poorest and most fragile states, including Eritrea and South Sudan.
But at present East Africa is playing catch-up —
at least in terms of the number of super-rich — with oil-rich Nigeria,
South Africa and Egypt, who have 37 billionaires between them.
The East African region is also home to the oldest
and the youngest billionaires on the continent. Mr Chandaria and
Mohammed Al-Fayed, the Egyptian property tycoon and Harrods boss, are
the oldest billionaires at 84, while Mr Dewji and Nigerian oil trader,
Igho Sanomi, are the youngest, both aged 38.
In a past interview with a media organisation in
Kenya, Mr Chandaria said he currently takes care of family businesses
spanning 11 countries in East and Southern Africa, from Ethiopia to
South Africa.
Mr Chandaria said his family was made up of 65
members who operate in various world cities, among them London, Geneva,
Nairobi, Singapore and Toronto. His flagship companies in East Africa
are Mabati Rolling Mills Ltd and Kaluworks Ltd in Kenya, Alaf Ltd in
Tanzania and Uganda Baati Ltd in Uganda.
Mr Merali, on the other hand, is the man behind
the conglomerate Sameer Group, which has interests in the manufacturing
and financial sectors.
Mama Ngina is also mentioned as one of the richest
women on the continent. The Kenyatta family has diversified holdings in
agriculture, manufacturing and processing, banking and real estate.
Opportunities for investment
In an interview with Forbes Africa Magazine, early this year, Mr Dewji said Tanzania offered great opportunities for investment after moving from socialism to capitalism.
He said his business empire, Mohammed Enterprises
Tanzania (MeTL) employs 24,000 people and contributes 3.5 per cent of
Tanzania’s GDP. Mr Dewji, whom the magazine referred to as the 1.3
billion-dollar Tsar of Dar, plans to build a $5 billion empire out of
Dar es Salaam within the next 5 years.
According to the magazine, Mr Dewji is credited
for growing MeTL more than 20-fold, increasing its revenue from $30
million to $1.1 billion by diversifying into various sectors, including
manufacturing, distribution, logistics, financial services, real estate,
cement, energy and mobile telephony.
The Ventures report names Aliko Dangote, a
Nigerian businessman involved in cement, food, oil and other sectors
with an estimated personal fortune of more than $20 billion, as the top
ranking billionaire on the continent.
Africa’s rich elite are spread across 10 countries including in
Kenya and Tanzania. The other countries making the top 10 are Morocco,
Zimbabwe, Algeria, Angola and Swaziland. The report, if accurate, means
that Africa now has more billionaires than South America (at 51) but is
still some way behind Asia, with 399.
Last month it was announced during a Nigeria-Kenya
Business Forum held in Nairobi that Mr Dangote, will invest $400
million to build a cement plant in Kenya. Allan Gray, the South African
financier, is the second richest man in Africa, with assets worth at
least $8.5 billion, followed by Mike Adenuga, a Nigerian involved in the
oil and telecoms industries, who has an estimated fortune of $8
billion.
Of the 55, 20 are Nigerian, nine are South African
and eight are Egyptian, Ventures said. The richest woman is Nigeria’s
Folorunsho Alakija, who made her $7.3 billion fortune mainly in the
country’s oil industry, it added.
She also studied fashion in London and made
dresses for Maryam Babangida, the late wife of Nigerian military ruler
Ibrahim Babangida. Next is Isabel Dos Santos, an Angolan investor and
the eldest daughter of Angolan President Jose Eduardo dos Santos,
followed Mama Ngina Kenyatta.
However, the report acknowledges that the list may
not be entirely accurate. “Tracking wealth in Africa is a complicated
pursuit, mostly because the vast majority of Africa’s high net worth
individuals (HNWIs) loathe discussing the specifics of their wealth,”
the report says.
It quotes Kenyan millionaire entrepreneur, Chris
Kirubi, who made his fortune in property, private equity, construction
and the media as saying: “This is Africa. It is improper to ask a rich
African man how much money he has in the bank. It is not our culture.
It’s almost taboo. I don’t usually want to discuss my wealth because you
never know who your enemies are and how they can use it against you.
When you broadcast your fortune, you attract unnecessary attention to yourself.”
Most of the wealthy Africans Ventures Africa spoke
to while putting together this inaugural ranking of Africa’s richest
people seemed to echo Mr Kirubi’s sentiments. The report adds that while
Africa’s richest men “are usually eager and quite willing to discuss
their acts of philanthropy, they are often hesitant to discuss specifics
about their finances, properties, and how they accumulated them.”
“I’ve made money but I prefer to talk about how I’m giving back.
Cultural factors
“That’s a better discussion. Don’t ask me about
how much I have,” says one Ugandan manufacturing tycoon whose fortune is
estimated at $120 million. He asked for anonymity. The report says that
cultural factors also discourage some wealthy Africans from declaring
their fortunes to the media.
It quotes Jimnah Mbaru, a Kenyan investment banker
and chairman of Dyer & Blair Investment Bank in Nairobi, who says
he believes that in traditional Kenyan society, a man is not considered
wealthy enough if he knows exactly how much he owns. “If you know
precisely how much you own, then you are not rich enough,” says Mr
Mbaru.
The Daily Telegraph said the Ventures
list was compiled using financial reports, by tracking equity holdings
around stockmarkets and identifying specific shareholding structures in
large, privately held companies. The results have been corroborated with
investment bankers and financial analysts to determine proper values
for companies, real estate and other assets, such as art collections,
jets, yachts and jewellery.
The list contrasts with Forbes, which is
the usual arbiter of the international super-rich, which last year
counted just 20 billionaires across the whole continent.
The report has raised some important issues about who is
benefiting from African economic growth and is likely to reignite debate
about inequality across the continent. The World Bank estimates that
the number of Africans living below the poverty line – measured as $1.25
per day – had fallen significantly because of strong economic growth,
dropping to 48.5 per cent in 2010, down from 58 per cent in 1999.
However, the overall numbers, because of
population increases, are still up. At the same time, the number of
those living on $10-$20 a day — which economists call a “consumer class”
or “working class” — has increased substantially over the past decade.
An Afrobarometer survey, which polled more than
50,000 people in 34 African countries, suggested that much of the recent
strong economic growth in Africa is only benefiting a small elite.
“Despite high reported growth rates, poverty at the grassroots remains little changed,” the authors of the survey said.
“In fact, income inequality may be worsening.”
This view was backed by UNDP in its Human Development Index for 2013, in
which it said that while most regions across Africa show declining
inequality in health and education they do show “rising inequality in
income.” However, official statistics do reflect a small improvement,
with the emergence of a tiny middle class across Africa.
By Paul Redfern and Jeff Otieno
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