Nearly 1,000 Kenyans lose HNWI status due to weak oil prices, COVID-19

More than 900 Kenyans lost their status as high net worth individuals (HNWIs) in 2020 due to unexpected economic trends such as the slash in oil prices, the COVID-19 pandemic and related disruptions, coupled with a depreciation of the Kenyan shilling.

Citing a survey by consultancy firm Knight Frank, Citizen reported that Kenya now has 3,323 dollar millionaires with a net worth above Ksh.109.7 million ($1 million), down from 4,235 in 2019.

This means the number of Kenyan HNWIs dropped by approximately 21.53 percent. The sharp decline has been attributed primarily to the COVID-19 pandemic. Many of these individuals held their wealth in the local currency and saw their net worth decline amid the depreciating currency.

The number of ultra-high net worth individuals (UHNWIs) with a net worth above Ksh.3.3 billion ($30 million) dropped by around 15 percent to 90 from 106 in 2019. UHNIs fared better due to “longer standing stakes with a heavy diversification in investments,” according to Tilda Mwai, a Knight Frank researcher for the Africa region.

As the global dollar-millionaire population continues to expand, the consultancy firm has forecasted an average of 29 percent year-on-year growth in Africa’s HNWIs over the next five years.

In a statement in Knight Frank’s The Wealth Report: Africa Supplement 2020, Managing Director for the Middle East and Africa James Lewis said “the next ten years have already been dubbed by some as the new ‘roaring twenties.’ I am optimistic that, with many positives to look forward to, they will live up to that soubriquet.”

Earlier, Knight Frank forecasted a global economic slowdown, poor governance and corruption, trade wars and political tension, adverse interest rates and bond returns, volatile exchange rates, climate change and regional armed conflict as likely issues that could impact wealth creation and preservation in Africa in 2020.