COVID-19 cuts 912 Kenyans from dollar millionaires list: Report

COVID-19 related disruptions have cut 912 Kenyans out of the dollar millionaires club according to a new Wealth Report by consultancy firm Knight Frank.

According to the new report that is based on a survey administered to investment banks and fund managers, Kenya now has 3,323 dollar millionaires- individuals with net worths above Ksh.109.7 million ($1 million) down from 4,235 individuals in 2019.

The fall in the number of individuals in the class referred to as the High Net Worth Individuals (HNWI) has been directly attributed to the economic slump witnessed across 2020.

The survey lists the depreciation of the Kenyan shilling in the last 12 months as the leading factor to the dip in dollar millionaires with the bulk of net worth being denominated in local currency terms.

Further, the general economic downturn has hit out at the wealthy individuals who are mainly invested in segments such as stocks and real estate which saw a sharp tumble in performance last year.

“HNWI took a direct hit from the pandemic. With the individuals having their wealth in local currency, a currency depreciation meant a decline in net worths,” said Tilda Mwai, Knight Frank’s Researcher for the Africa region.

Similarly, the number of Ultra High Net Worth Individuals (UHNI) in Kenya, defined as persons with net worths above Ksh.3.3 billion ($30 million) declined by 15 per cent to 90 down from 106 in 2019.

The lesser shrinkage in UHNI has been attributed to a greater diversification of investments by the super wealthy group.

“UHNI have longer standing stakes with a heavy diversification in investments,” added Mwai.

Globally, the number of dollar millionaires shrunk by 8 per cent to 48.5 million people from 52.9 million in 2019.

Africa, meanwhile, has 231,309 dollar millionaires down from 251,511 persons in 2019.

The number of the super rich (UNWI) globally nevertheless beat the declining trend to grow by two per cent to 521,653 persons.

The continent of Africa also saw its number of UNWI grow by five per cent to 3270 people.

On overall, the number of wealthy individuals is expected to climb from this year as the world re-emerges from the COVID-19 disruptions from the past year.

Africa is projected to lead the surge in wealthy individuals based on its resilience to setbacks.

“There are comparatively more opportunities in Africa. New areas such as fintech and remote work are now emerging. It is in entrepreneurship and how quickly the continent responds to difficulties,” said Andrew Shirley, the editor of the Knight Frank wealth report.

Kenya is projected to have 4,840 dollar millionaires by 2025 alongside 110 individuals with net worths above $30 million (Ksh.3.3 billion at the current exchange rate).