There is a difference between wealth and riches
By MUNGAI KIHANYA
The Sunday Nation
Nairobi,
04 March 2018
Reading through the story on the wealth declarations of various public
office nominees (Ambassadors and Principal Secretaries) in the
Daily Nation of 1st
March, I got the impression that the writer did not know the difference
between income and net worth. But I suspect the author is not alone in
this confusion: many people – perhaps, even the members of the
Parliamentary Committees vetting the nominees – assume that the two are
the same.
There is a difference between a wealthy person and a rich person. You
are wealthy if you own highly valuable property and you are rich if you
have a high income. Being in one category does not automatically place
you in the other. You can be poor while having high-value property or be
rich but owning very little.
Suppose you earn one million shillings per month. You can be said to be
quite rich, can’t you? What if you are staying in a house where the rent
is Sh300,000; you have a car bought with a loan that you repay Sh250,000
per month; and your three kids are going to a school where the fee is
Sh500,000 per child per term (Sh3755,000 per month, in total)?
That leaves with only Sh75,000 to cater for other expenses, including
fueling your expensive car. With such a lifestyle, you are unlikely to
have much money remaining in your bank account at the end of each month.
You will be a very rich person with very little wealth.
On the other hand, you could be earning Sh30,000 per month. Spending
Sh10,000 on rent and struggling to make ends meet with the remainder.
But perhaps you are able to save Sh1,000 each month in the Saving &
Credit Co-operative (SACCO). That easily makes you wealthier than the
one-million-shilling per month fellow; but he is richer than you!
It is rumoured that, at the teachers’ SACCO, those who teach in primary
schools have much bigger balances per member than their counterparts in
in secondary. This, despite the fact that the latter earn much higher
salaries than the former.
The wealth declarations of public officers are simply a listing of
assets and liabilities of the person. They are not a historical record
of their salaries! Thus; from that document, there is no way of telling
how, for example, Dr. Cleopa Mailu accumulated his net worth of Sh617
million. The 62-year-old doctor has worked for more than three decades.
I am quite sure that, during that time he has bough many assets and sold
them at a profit and used the money to acquire others.
It is also grossly inaccurate to state that Willy Bett’s “money has been
accumulated mainly from employment, rentals and farming”. Mr. Bett’s
Sh125 million net worth is not his income! It not money sitting in some
bank account either. It is the value of the rental buildings, the farm,
etc., minus any liabilities that he owes to other people and
institutions.
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