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Analysts project 5.5 – 6% growth for Kenya’s economy in 2019

Kenya’s millionaires to increase by 9.8%

Kathleen Ndongmo

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Kenya has been grouped among countries that are set to produce new millionaires at the highest rate in the next five years.

The country is now ranked sixth among top global cities and third in Africa after Nigeria and Egypt.

Global research firm Wealth-X, which tracks affluence trends across the world, estimates that Kenya’s millionaires will increase at a rate of 9.8 percent per annum for the next five years.

Wealth-X puts the country in a special league of top 10 economies in the world where new high net worth (HNW) individuals will be produced faster than the overall economic expansion trends.

The report regards HNW individuals as people with a net worth of between $1 million (Sh101.74 million) and $30 million (Sh3.1 billion).

The projected millionaire growth pace is the same as that of the world’s second-largest economy, China, which is tied with Kenya at number six globally.

According to Wealth-X estimates, the number of individuals in the HNW bracket totaled 22.4 million in 2018, with a combined net worth of $61.3 trillion.

The ranking took into account current wealth levels, population growth estimates and anticipated future investment opportunities.

The report supports the findings in Wealth-X’s World Ultra Wealth Report 2018 that also found that the number of Kenya’s ultra-rich grew by 11.7 percent in 2017, ahead of India, Hong Kong and the United States.

It classifies the ultra-rich as people with a net worth of more than Sh3.1 billion.

Realtor Knight Frank also published a report showing that Kenya created 180 new dollar millionaires in 2017, increasing the number of persons with a net worth of more than Sh500 million to 1,290.

Most economic analysts have projected the Kenyan economy to grow at between 5.5 to 6 percent this year driven by agriculture, manufacturing and the service sectors.

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South Africa’s Foschini to halt Kenya, Ghana operations

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations

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South Africa's Foschini to halt Kenya, Ghana operations
(File photo)

South African fashion retailer, the Foschini Group is considering shutting down its Kenya and Ghana businesses.

The firm’s Chief Executive Officer, Anthony Thunstrom, affirms that at least, six stores will be affected in both countries.

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations that had hit sales.

In July, department store chain, Woolworths pulled out from West Africa for a second time.

The Foschini Group will review economic growth, legislature and lease negotiations in Kenya and Ghana before making its decision.

Come September, in its home market, Thunstrom says The Foschini Group will launch a smaller format Sportscene store that will enjoy entertainment features such as a basketball court and a DJ booth, in an effort to lure millennials into its stores and away from online players such as Naspers’ majority-owned Superbalist.

The store will be launched in September in Johannesburg’s upscale Sandton shopping and financial district.

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Total Mozambique gas project will go on despite insurgency

Total will also acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa

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Energy major Total on Friday said it remained committed to a Mozambique liquefied natural gas project on the country’s northern coast despite deadly Islamist insurgent attacks.

Total will become the operator of the $25 billion Rovuma LNG Project whose construction began on August 5 in the Afungi Peninsula.

The company is also set to acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa, strengthening Total’s position in Africa.

But the area where the project is located has been targeted by jihadists since October 2017, claiming more than 300 lives.

Attackers in February launched an assault on a convoy of vehicles from an Anadarko contractor, killing one worker and injuring others. 

This led to the suspension of operations for a few months, with activities only resuming after the government announced the deployment of armed forces.

Several hundred suspected attackers have been arrested, according to authorities, but sporadic assaults continue.

On Friday Total’s CEO Patrick Pouyanne reaffirmed Total’s commitment to the LNG project saying it “is a unique asset which perfectly fits our strategy and our skills.

“Please be assured of the commitment of Total to bring the best of our human, technical and financial capacities to further strengthen the project execution … in the interests of all those involved, including the government and people of Mozambique,” he said in a statement.

The project is expected to be transformational for Mozambique, creating an estimated 5,000 direct jobs and 45,000 indirect jobs.

The country’s gas deposits are estimated at 5,000 billion cubic metres and would make Mozambique a major exporter of liquefied natural gas.

The use of natural gas is on the rise globally as countries struggle to meet energy demands and shift away from using coal.

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Kenya plans to tax OTT services like Youtube, Netflix

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers

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Kenya plans to tax OTT services like Youtube, Netflix

Kenya’s Information Communication and Technology (ICT) ministry is working on completing a new tax scheme.

This framework, reports say, will be used to tax foreign online streaming media services such as YouTube and Netflix.

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers.

OTT services include all applications that offer voice, video and messaging services over the internet.

Communications Authority Director-General, Francis Wangusi says online content providers exploit the Kenyan industry. Yet, neither the government nor artistes benefit from them.

According to Wangusi, “many countries have policies that guide these services and that is where we are heading as a country”.

He adds that technologies that will facilitate taxation of OTT services are available.

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