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 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.

READ: Growing unemployment raises risk of political, social upheavals in EA

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 former powerful Cabinet minister Nicholas Biwott, who has interests in agriculture, real estate and energy among other sectors. Other Kenyans are industrialist-cum-philanthropist Manu Chandaria, industrialist Naushad Merali and President Uhuru Kenyatta’s mother, Mama Ngina.

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.

Absolute poverty

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’s 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.

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 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.

READ: Time, money and Aliko Dangote

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