BLACK BILLIONAIRES: Their  Wealth in Dollars

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James Odewale

 

Black billionaires are individuals of Black African ancestry with a net worth of at least US$1 billion. According to Forbes 2018 ranking of the world’s billionaires, Nigerian business magnate Aliko Dangote with a net worth of $13.8 billion is the world’s richest black person.  Others on the list are Nigeria’s Mike Adenuga with $4.6 billion,[2] American media mogul Oprah Winfrey with a net worth of $2.8 billion (2018),South African gold magnate Patrice Motsepe, with $2.9 billion, Southern Africa Oil and gas Mogul Byaruhanga Kimberly Junior, with $2.7, Nigeria’s Folorunsho Alakija with $2.5 billion and Mo Ibrahim, a British billionaire of Sudanese Nubian ancestry, who has been on the Forbes Billionaire list since 2008 and in 2012 had a net worth of $1.1 billion.

In the years since, American investor Robert Smith, with a net worth of $4.4 billion, and American sports executive Michael Jordan, with $1.65 billion, have risen to the list.

From 2001 to 2003, Forbes listed American television network executive Bob Johnson as a billionaire,[5] but dropped him after his fortune was split in his divorce.[when?] He returned to Forbes Billionaire list in 2007 with a net worth of $1.1 billion. In 2008 Johnson’s wealth dropped again, this time to approximately $1.0 billion and by 2009 he fell off the list again. Nigerian petroleum executive Femi Otedola briefly emerged as a billionaire in 2009, but did not remain one in subsequent years. He returned to the list in the company of a fellow Nigerian, sugar tycoon Abdul Samad Rabiu, in 2016, but both were dropped from the rankings the following year.

Multiracial billionaires with significant black ancestry have also been identified over the years. Saudi Arabian billionaire Mohammed Al Amoudi, of Hadhrami Yemeni and Ethiopian descent, has been on the Forbes billionaire list since 2002 and in 2012 had a net worth of $12.5 billion.[9] Michael Lee-Chin of Canada, who is Jamaican of Chinese and Black ancestry was on the list from 2001 to 2010, but dropped off in 2011.[10] In 2013 Isabel Dos Santos who is of both Angolan and Middle Eastern ancestry made the list with a $2 billion net worth.

Of all the above-mentioned billionaires identified by Forbes, only Oprah Winfrey qualified for Forbes 2009’s list of the world’s 20 most powerful billionaires, a list which considered not only wealth, but also market sway and political clout. Winfrey was considered especially powerful because of her influence on American consumer choices and her pivotal role in getting Barack Obama elected.

Black-White Wealth Gap

According to sociologist Dalton Conley, there are two theories that explain the Black-White wealth gap.

The “historical legacy thesis” contends that the current wealth gap was created by the “head start” that White people have had in amassing wealth and inheriting wealth from generations prior. Continuous racial discrimination against Black Americans also contributes to this theory.

The “contemporary dynamics thesis” explains how modern phenomena, specifically systematic racism in the housing and credit markets, is the main source of the wealth gap.

In 1994, the typical Black American family had a net worth of $9,800 compared to the average White family’s $72,000.[12] By 1997, the median family income for African American families was nearly half that of White families at 55%, $26,522 compared to $47,023.[12]

“Most Black wealth is shown to consist of home equity and automobile ownership while a substantial portion of White wealth is shown to include financial assets, the key to wealth accumulation. [12] As a result, the Black-White gap in assets has continued to grow since the 1960s when civil rights victories were won.”[12]

Post Slavery

In 1860, freed Black Americans owned approximately $50 million worth of land. [12] Land redistribution was promised as reparations for freed slaves by President Andrew Johnson after the Emancipation Proclamation.

 [12]

This promise was not fulfilled for many. For those who did receive land, the ownership was temporary as land was quickly given away to White individuals. [12]

Former slaves faced a slim job market and many were forced into sharecropping–a system in which laborers rent land from a landlord to grow crops and provide a share of their crops as rent. [12]

“Blacks tried to escape sharecropping by attempting, as far as possible, to accumulate capital and buy land or run the leasing along capitalist lines. Most of these attempts ended in failure [….]” [13]

1900–1938

1900-1938 marked what is considered the “Golden Age of Black Business.” In response to Plessy v. Ferguson (1896) which upheld racial segregation laws, Black Americans established successful eateries, restaurants, hotels and banks. [14]

The coalition of Black businesses and entrepreneurs was coined  “Black Corporate America.” [14] During this time, Black businesses grossed sales of up to one million dollars. [14]

In 1900, Booker T. Washington created the National Negro Business League and Maggie Lena Walker became the first American woman and first Black American woman to establish a bank in 1903. [14]

Greenwood, Tulsa in Oklahoma was an example of a prosperous Black neighborhood in the early 20th century and was one of the richest Black neighborhoods in the country. Known as “Black Wall Street”, Black attorneys and doctors were highly concentrated in the area, as were successful Black grocers, hotels and restaurants. [15]

Black inventors such as George Washington Carver–who developed a system to improve soils after cotton planting–helped develop early ideas for technology, however they often had to sell their patents to corporate White America “because they did not have the same access to venture and development capital.” [14]

Leading Black female entrepreneurs included Madame CJ Walker and Annie Turnbo-Malone. Walker invented several beauty products and was considered the wealthiest self-made woman in America in 1919. Turnbo-Malone also developed cosmetic products for Black women. [14]

1939–1964

In the period of 1939-1964, Black businesses grossed sales in the multi-millions.[14] Black American entrepreneurs sought defense contracts–allowing them to produce materials to be used in the war–during World War II. [14]

Although only a few received contracts, this marked the first time a large-scale consumer, the U.S. government, bought products from Black businesses. A 4 million dollar defense contract was given to The McKissick Brothers Construction Company to build an airbase at Tuskegee Institute to train the Black 99th Pursuit Squadron. The company employed approximately 2,000 Black employees. [14]

S.B. Fuller led Black Corporate America in the 1930s with his successful door-to-door sales business. He acquired several White companies which sold hair care products and was successful until the 1950s, when White consumers found out that Fuller was Black. The White consumers pulled out of the market imminently and Fuller went bankrupt. [14]

The 1954 Brown v. Board decision that desegregated schools prompted more widespread protest for economic equality. [14]

1965–1990

Black business sales reached 100 million in the time period of 1965-1990. [14]

Protest prompted the federal government to create Black Capitalism initiatives such as President Nixon’s 1969 Executive Order that created the Office of Minority Business Enterprise. [14]

According to Dalton Conley, by 1971, Black banks had received $44.9 million in government deposits. [16] However these deposits, which were “unstable accounts from government agencies, eventually hurt Black banks because their volatility meant that they required higher servicing costs.” [16] “One study even found that such deposits were actually more costly to Black banks than their regular customers’ deposits.” [16]

 

Black business expanded by continuing to seek defense contracts. One example was electrical engineering company Jackson and Tull which received contracts from NASA and the U.S. Department of Defense in 1974. [14]

Black innovators were also involved in the rise of internet and technology. Nigerian immigrant Phillip Emegwali created 65,000 processor computer that produced 3.1 billion calculations per second, laying the groundwork for Apple’s Dual Processor Power Mac and IBM’s 65,000 processor supercomputer. He received the 1989 Gordon Bell Prize for supercomputing.

1990–Present

Starting in 1990 up to the present day, businesses in Black Corporate America have grossed sales in the billions of dollars.

Despite this upward trend, there was not a Black billionaire in U.S. dollars until 2001.

The 2000 edition of Forbes 400, which documented individuals who amassed wealth from the tech boom, did not feature any Black individuals. [17] The 400 individuals on the list had a net worth of more than one trillion, which was more than the wealth of all 33 million Black Americans combined.

However, the amount of African Americans earning degrees in business has increased since the 70s. “The number of African Americans earning bachelor’s degrees in business increased by 316.6% between 1976 and 2008, whereas the number of African Americans earning MBAs increased by 1,399%, from 1,549 to 23,220.”

Robert Johnson, owner of BET (Black Entertainment Network) became the first Black billionaire in American dollars with a net-worth of $1.6 billion.

The success of hip hop music and Black music videos stimulated Black Corporate America and launched BET to its success.

Prominent Black female entrepreneurs like Oprah Winfrey and Cathy Hughessaw success as they entered the realm of communications. Oprah became the first Black female billionaire in 2003. Cathy Hughes became the first Black American woman to take her company–Radio One– public on the New York Stock Exchange in 2004.

As of 2019, there are currently fourteen Black or mixed Black billionaires in the world, out of a total of 1,810 billionaires, which means less than 0.77% of the billionaires in U.S. dollars are Black.

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