A recently published report shows that Tanzania now outranks Kenya in terms of Ultra High Net-Worth Individuals (UHNWIs). This is in spite of the fact it has a smaller economy than its neighbour to the north.
Property consultants Knight Frank published The Wealth Report, giving a “global perspective on prime property and investment”. The latest publication shows that Tanzania has the fourth highest concentration of UHNWIs - those with a net worth of US$30 million or more - behind South Africa, Egypt, Nigeria and Morocco.
Kenya’s drop in the rankings are a result of poor economic performance and political instability, both inextricably linked. The bruising 2017 presidential election led many to put a hold on investment decisions, resulting in jobs losses and a cut in corporate dividends.
There are, of course, other factors. Last year’s poor weather led to a bad harvest; particularly disruptive in a country where one third of its GDP derives from agriculture.
Conversely, Tanzania’s rise is more difficult to justify. It remains Africa’s tenth largest economy in terms of GDP, so why does it have the fourth highest concentration of UHNWIs?
The presidency of John Magufuli has not tried to court outside investment like some of its neighbours in the region. In fact, there are myriad examples foreign companies upping sticks and leaving, largely due to the governments punitive tax measures.
The “bulldozer”, a nickname the president reportedly relishes, has fostered a “siege mentality”, a collective state of mind in which the public believe themselves to be oppressed, isolated and attacked in the face of foreign intentions.
Leaders often cite the insidious “beberu”, the Swahili word for goat, or imperialist, from the pulpit of high office. This xenophobic rhetoric means the country now sits an unhealthy 141 out of 190 on the World Bank’s ease of doing business index.
Tanzania has been described as “totally uninvestable” by a financial authority with interests across the continent. This is backed up by the Delegation of German Industry and Commerce for Eastern Africa, who showed how business confidence amongst German companies has rapidly declined across every metric.
This points to an emerging plutocratic class in the country. Businessmen and lawmakers that pledge fealty to the government are handsomely rewarded, whilst those that refuse to kowtow are purged.
Erick Kabendera, an investigative journalist who was held for seven months without trial, explains how the president’s apparent war on graft is really a war on disloyalty. “Mr Magafuli wasted no time in cracking down on corruption (at least amongst his enemies)”, he wrote. “But since then the only thing being squashed in Tanzania are civil liberties”.
What is most tragic, is that society’s most vulnerable are the ones that suffer. According to the United Nations’ annual World Happinessreport, Tanzania is the fourth unhappiest country in the world. Since 2013, its ranking has fallen by more than 14% to where it is now.
For a country not experiencing war, this is an astonishing figure. But then again, it is not at peace. Einstein said “Peace is not merely the absence of war but the presence of justice, of law, of order - in short, of government”. It is Tanzania’s lack of government that explains why it has more UHNWIs, and less happy ones.