Kenya's Richest One Percent Owns Nearly Half of the Wealth Created in the Last Ten Years

Kenya's Richest One Percent Owns Nearly Half of the Wealth Created in the Last Ten Years The wealthiest one percent of Kenya's population owns nearly half of the wealth created in the last ten years. The richest one percent holds more wealth than 90 percent of Kenyans combined and 13 times as much as the bottom half; the 125 richest individuals even surpass 42.6 million Kenyans in wealth. The list of Kenya's richest includes industrial pioneers, bankers, and political figures. Among the top ten are the Moi and Kenyatta families, as well as prominent names like Manu Chandaria, considered one of the richest industrialists with an estimated net worth of around USD 1.7 billion. Politically connected families control over 50 percent of private wealth. Kenya's wealthiest individuals have often built their fortunes over generations and diversify their investments across sectors such as manufacturing (e.g., Bidco Africa, Comcraft Group), banking (e.g., Equity Bank), media (e.g., Royal Media Services), and land ownership. Oxfam is calling for progressive tax reforms, such as higher capital gains taxes, to distribute the benefits more broadly. This wealthiest group controls approximately 78 percent of the country's financial assets, including stocks, company shares, real assets, and securities. The poorer half of the population, by contrast, owns only a fraction of this wealth, highlighting the significant inequality. The richest one percent received 40 percent of all newly created wealth during a period of strong economic growth, while millions of Kenyans were plunged into extreme poverty. This disparity demonstrates that despite average annual economic growth of 5 percent over the past decade, most citizens have not benefited equally from this growth. The wealth of this elite group has grown almost twice as fast as that of the rest of the population. The wealthiest Kenyans today possess more wealth than 90 percent of all Kenyans combined. Furthermore, the 125 richest Kenyans own more wealth than 42.6 million Kenyans combined, further widening the economic gap in the country. What remains is extreme inequality. A few profit enormously, while most struggle to survive. Nearly half of Kenyans (approximately 26 million people) live in extreme poverty, surviving on less than 130 Kenyan shillings (about US$1) per day. Just 125 individuals possess more wealth than the poorest 42 million citizens. A national debt of 68.8% of GDP and a budget deficit of 5.9% mean that tax revenues (a third of which goes toward interest payments) severely strain public services such as healthcare, hitting low-income groups the hardest. A new survey by the National Taxpayers Association reveals that Kenyans feel the tax burden most acutely from the Value Added Tax (VAT). 53.3 percent cited it as the tax that puts the biggest strain on their finances. VAT affects almost every purchase, from groceries to household goods. It is therefore the most visible and unavoidable tax for many households. The business license fee follows at 16.1 percent, highlighting the burden on entrepreneurs and small business owners, especially in a challenging economic environment. Payroll tax (PAYE) was mentioned by 12.3 percent of respondents. This reflects how employees feel their income is significantly reduced before it reaches them. Market fees and stall charges, which directly affect vendors, accounted for 10.4 percent. Excise tax (3.3 percent), property tax (3.1 percent), import/export duties (1.2 percent), and the inter-county levy (0.5 percent) followed. The results highlight the widespread concern about affordability, the strain on household budgets, and frustration with the rising cost of living. Given the economic uncertainty Kenyans face, understanding which taxes are the hardest on their wallets provides valuable insights for policymakers reviewing the country's tax system. For example, low-income households in Nairobi face an effective inflation rate 27% higher than that of wealthier households. The widening gap between rich and poor reflects this frustration. There are current complaints that government policies, through excessive taxation and cuts to programs like the SHA health insurance, have put Kenya "back on track." The cost of living continues to rise. Food and basic necessities are putting a heavy strain on households. GDP per capita is expected to increase nominally by 2.5%, reaching approximately US$2,550. Adjusted for purchasing power parity (PPP), it stands at around US$3,470, which, while reflecting a gradual improvement in living standards, remains low compared to other countries in the region. Food inflation reached 8.0% year-on-year in October. This was triggered by a lack of rainfall (La Niña effects), which reduced harvests by 30% and drove up prices: tomatoes became 37% more expensive, sugar 23% more expensive, and cabbage 20% more expensive. The electricity consumption of a typical household using 200 kWh rose by 3% month-on-month, transportation costs increased by 1.4%, and fuel prices remain high (gasoline approximately 185 KES/liter). Overall inflation remains stable at 4.6%, but spending on essential goods consumes 3–3.5 million KES. Food aid will be needed until mid-2026, particularly in arid regions like Turkana. Families are cutting back on non-essential spending due to livestock losses, seeking side jobs, or relying on markets. This is being described as an “exploding” crisis. Even parking fees are being circumvented out of desperation. Low salaries (e.g., newly qualified doctors abroad earning around 500,000 KES compared to similar salaries domestically) seem inadequate given the local cost of living. And there are other burdens. There is debt, job losses, and the overall mood. Kenya’s foreign debt in 2023 was approximately US$40 billion, equivalent to 37 percent of its GDP. The loans were primarily taken out for infrastructure projects such as roads, railways, and the electrification of rural areas. A large portion of the debt is external, but there is also significant domestic debt owed to banks and businesses. Despite efforts and a debt relief program from the International Monetary Fund (IMF), Kenya remains trapped in a debt spiral, as infrastructure investments have not generated the expected revenues and borrowing costs remain high. The mounting debt has led to social tensions and protests, as a large segment of the population feels the economic strain. The debt burden on the Kenyan population is part of a larger problem of public debt in Kenya, which reached approximately 72 percent of gross domestic product (GDP) by the end of 2023. This high level of debt stems primarily from loans taken out for infrastructure projects, as well as from factors such as the COVID-19 pandemic and rising prices for basic foodstuffs and petroleum products. High levels of public debt mean that large portions of government revenue are used for debt servicing, leaving less funding for essential public services such as healthcare, education, and social security. The impact of this debt on the population is evident in significantly higher living costs, for example, for food, medicine, and fuel, which greatly increases the financial burden on the population. Political elites are publicly blamed for the high debt, while price increases and the cost of borrowing exacerbate the situation. Debt has nearly doubled in recent years, triggering protests against tax hikes and economic hardship. Poverty affects a significant portion of the population. Measured against international purchasing power parity of US$3.00 (adjusted for low-middle-income countries), the poverty rate is projected to decline slightly to 43.8% by 2025, a decrease of 0.7 percentage points. However, national estimates show that the overall poverty rate was 39.8% in 2022 (the most recent comprehensive data available), down from 38.6% in 2021. Multidimensional poverty will affect 25.4% of the population (approximately 13.7 million people) in 2024. Income inequality is worsening, with the Gini coefficient rising from 0.36 in 2020 to 0.39 in 2021. Wealth is highly concentrated: 125 people own as much as the poorest 42% of the population. Economic growth has not been inclusive, thus hindering widespread poverty reduction. The official unemployment rate is around 5.6%, but broader indicators (including underemployment) reached 13.9% in 2022. Youth unemployment and the NEET (neither employed nor in education) rate are particularly high, exacerbating financial insecurity. The labor market is dominated by the informal sector (81% of employment). There have been no recent minimum wage increases, and the share of the working population in total income is declining. Average household incomes remain low, and a significant proportion of the working population is affected by in-work poverty (less than US$2.15 purchasing power parity per day). Sustained economic growth of 5.8% is needed to absorb the 680,000 people entering the labor market annually; faster structural changes could create 1.36 million jobs and reduce the unemployment rate to 7%. The labor market is dominated by the informal sector. In summary, Kenya's economic growth, specifically its GDP, has nearly doubled from 9 trillion Kenyan shillings in 2015 to 16.15 trillion Kenyan shillings most recently. Despite this growth, over 7 million people have fallen into extreme poverty. Wealth concentration at the top has intensified, with the wealthiest accumulating their wealth significantly faster than the majority. To reduce inequality and promote more inclusive growth, more targeted government investment in social protection, education, and healthcare is expected. 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