The allure of a good life and taste for the finer things in life that money can buy has taken root in Kenya as the number of dollar millionaires grows.
Kenya’s high-net-worth individuals though relatively reserved being in a country where the poverty rate stands at 36 per cent, are investing in exotic homes and are joining a small breed of wealthy people across the globe who spend fortunes in the rarest and most grandeur objects of desire like whiskies, limited edition coins, classic cars, art, stamps and vintage wine.
Despite choosing a largely private life, Kenya’s dollar millionaires opt for foreign basic and university education for their children and a big number also engage in philanthropic activities.
According to the recently released The Wealth Report’s Attitudes Survey, high-net-worth individuals (HNWIs) in Kenya and across the globe are pushing the levels of opulence to new heights.
Last year, for instance, David Hockney’s Portrait of an Artist became the most expensive work by a living artist, and was sold for $90 million, while a 60-year-old bottle of The Macallan 1926 became the most expensive bottle of whisky ever sold at a price of $1.5 million.
To the three and a half billion people across the globe who are struggling to meet basic needs, living on less than $5.50 per day according to the World Bank, it is nothing short of mind boggling that someone would pay $1.5 million for a bottle of whisky.
Yet, over the past decade, rare whisky has outperformed all other investments of passion, with classic cars, coins, stamps and art making the top five best performers.
“The records set in 2018 show that wealthy collectors are still prepared to pay top prices for the rarest and most desirable objects of desire, and whisky is no exception,” said Andrew Shirley, The Wealth Report editor.
He added that rare whisky collectors are not only tracking down individual bottles but also seeking their own casks and are prepared to pay six- or seven-figure sums to get them.
In East Africa, East African Breweries Ltd is wooing the growing class of collectors after launching a mini-mentorship programme for its reserve brands.
In Kenya, the number of HNWIs — those with a net worth of over $1 million excluding their primary residence — is on the rise.
Last year the number of dollar millionaires in the country grew to 9,482 from 9,176 the previous year, a 3.3 per cent increase.
The number is projected to increase by 22 per cent to 11,584 individuals over the next five years, a much faster growth compared with the 13 per cent increase recorded since 2013.
Out of the 9,482 HNWIs, 125 were ultra-high-net-worth individuals (UHNWIs) with a net worth of over $30 million excluding their primary residences.
Only four individuals crossed into this wealth bracket last year, with the number expected to jump to 155 UHNWIs by 2023.
Kenyans joining the super-rich bracket are not shying away from flouting their wealth, mainly in luxury homes including exotic beach houses.
Some 18 per cent of Kenya’s HNWIs bought new homes in the country last year, with eight per cent purchasing houses abroad.
In the next year, 22 per cent of Kenya’s wealthy plan to buy new homes even when first and second homes make up 45 per cent of total wealth for the super-rich who own an average of 2.7 homes.
On average, Kenya’s super-rich allocated 25 per cent of their investment portfolios in equities, 22 per cent in properties, 22 per cent in cash or cash equivalents, 20 per cent in bonds, three per cent in private equity, three per cent in luxury investments (art, wine, classic cars), one per cent in gold with the remaining four per cent going into other asset classes.