Impressive economic growth and a large and growing consumer
goods market in East Africa have pushed five businessmen from the region
to the list of Africa’s 55 richest billionaires, whose combined fortune
stands at $143.88 billion, a new ranking shows.
However, the 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.
Poverty data from the five East
African Community (EAC) countries — Kenya, Uganda, Tanzania, Rwanda and
Burundi — shows that at least 40 per cent of their 141 million people —
or 56 million people — live below the poverty line of a dollar a day.
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.
According to Ventures
magazine, the most famous Kenyan on the list is President Uhuru
Kenyatta's mother, Mama Ngina. Other Kenyans are
industrialist-cum-philanthropist Manu Chandaria, industrialist Naushad
Merali and formerly powerful Cabinet minister Nicholas Biwott, who has
interests in agriculture, real estate and energy among other sectors.
Tanzanian Mohammed Dewji completes the list of the richest East Africans.
Economists said the widening of the
income inequality gap has become the Achilles’ heel of the region’s
ambitious growth projects as wealth continued to be concentrated among
the rich.
The numbers of people living in
absolute poverty — less than $1.25 a day — across East Africa remains
high, with Burundi and Tanzania having the highest percentage (at over
81 and 67 per cent respectively) and Ethiopia and Uganda (at 30 and 38
per cent respectively), the lowest in the region, according to the World
Bank statistics compiled between 2005 and 2012.
In a new report, the World Bank’s Africa Pulse
magazine says that poverty and inequality across sub-Saharan Africa
remain “unacceptably high and the pace of reduction unacceptably slow.”
Almost one out of every two Africans lives in extreme poverty today,
although economists believe that rate will fall to between 16 per cent
and 30 per cent by 2030.
Makhtar Diop, the World Bank
Group’s vice president for Africa, questioned last week whether current
growth rates can continue: “Sustaining Africa’s strong growth over the
longer term while significantly reducing poverty and strengthening
people’s resilience to adversity may prove difficult because of the many
internal and external uncertainties African countries face,” he said.
However, in East Africa, economic
projections are more positive, with growth rates in Tanzania, Uganda and
Rwanda all averaging around or above seven per cent throughout the past
decade, around double that of Kenya (see table). Moreover, the
percentage of people who are extremely poor is decreasing.
Middle-income status
World Bank projections indicate
that all three countries will have become lower middle-income countries
in the next decade and all will have surpassed Kenya — in terms of per
capita income — by 2025.
Economist Wolfgang Fengler says
that the EAC is currently one of the fastest growing regions in the
world. He adds that if Rwanda, Tanzania and Uganda maintain their
ongoing growth momentum and if Kenya accelerates, all four countries
will reach middle income status within the next 10 years.
“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 ForbesAfrica
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 es Salaam, 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, twenty 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.”
Cultural factors
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. 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 stock markets 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.
Shortlisted Candidates for Interviews 
