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39 Kenyans Join Dollar Millionaires List - Money Weekly
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39 Kenyans Join Dollar Millionaires List - Money Weekly

Kelvin Kiogora
March 3, 2022

The month of February has been a tough one for most Kenyans, with netizens even claiming that it has been rougher than the historically tough month of January. Fortunately, we’ve turned a new calendar leaf, but what does this new month hold for us?

Like always, let’s check out the top news from the last 7 days that could affect your money in March and the rest of the year.  

8 in 10 Kenyans Unhappy With Economic Conditions

Results of a new study conducted by Afrobarometer show that close to 9 out of every 10 Kenyans (85%) are unhappy with the current state of the economy, terming it as “fairly bad” or “very bad.” This figure is a 30% increase from the 55% of Kenyans who were unhappy with the economy back in 2016.

The study also revealed that 74% of Kenyans believe that the country’s economy is headed in the wrong direction. In addition, the survey also revealed that a significant proportion of citizens frequently lacked cash income, food, clean water, cooking fuel, and adequate medical care over the past year.

Based on these hardships, most Kenyans believe that the government is performing dismally in terms of keeping prices stable, improving the living standards for the poor, and managing the economy.

The results of the Afrobarometer survey come just a few days after Kenyans protested against high food prices on Twitter under the hashtag #lowerfoodprices.

Food prices in the country have skyrocketed over the past several months, making most food items unattainable for low-income earners.

For instance, between the month of January and February, the cost of a 2kg pack of sifted maize went from Ksh126.31 on average to Ksh129.25, while the average price of a 400g loaf of bread went from Ksh55.19 to Ksh55.85.

Meanwhile, the cost of 500g of cooking fat went from Ksh142.05 to Ksh149.44 in the same period, while the cost of a litre of cooking oil rose to Ksh305.70.

Currently, with Ksh100 ($0.88), a Kenyan cannot buy a 400g loaf of bread and a half-litre packet of milk. Other food items that have registered a significant increase in prices include Irish potatoes, carrots, onions, capsicum (pilipili hoho), and oranges.

Kenyan Exporters To Feel The Heat Of Russia-Ukraine Tiff

Doing business will become more expensive for Kenyan exporters starting this month as the effects of the Russia-Ukraine conflict start being felt. Already, shipping companies have increased their charges by 10%, citing the high costs of fuel.

The cost of a barrel of crude touched $100 (Ksh11,390), the highest price for the commodity since 2014. With the global fuel supply affected by the war between Russia and Ukraine, this will lead to higher fuel prices, forcing exporters to pay more to get their goods to foreign markets. Experts predict that shipping costs could rise by a further 10% in April.

The high freight costs will also affect the cost of goods being imported into the country, pushing up the cost of living at a time when most Kenyans are already struggling to put food on the table.

Half Of Kenyans To Quit Day Jobs In Favour Of Side Hustles

Close to half of Kenyans with side hustles are planning to drop their day jobs within the year to fully concentrate on their side hustles, according to a survey by Viffa Consult, an SME consultancy.

According to the survey, which polled 125 Kenyans from 7 counties who run various side hustles, 48% of the participants intend to quit their day jobs to work on growing their side hustles, while another 24% intend to continue growing their side hustles while still working their day jobs.

Meanwhile, 20% of business owners reported that they are looking for full-time jobs while still planning to keep their business running.

The findings from this survey are an indicator of the success of side hustles, which have seen a huge increase in popularity over the last few years, particularly during the Covid-19 pandemic when people experienced massive pay cuts and job losses.

According to the survey, close to three quarters (72%) of those running side hustles claimed that their side hustles are profitable.

The key reason why most people start a side hustle is to supplement salaries from their day job. Other major reasons behind side hustles include investing disposable income, planning for retirement, and security in case of layoffs. For others, side hustles are simply hobbies.

The most popular side hustle ventures are in the wholesale and retail sector, with other popular ones being ICT, education, media and entertainment, and construction.

More Kenyans Join The Dollar Millionaires Club

Data from the latest edition of the Knight Frank Wealth Report shows that the number of High Net Worth Individuals (HNWI) in the country rose from 3,323 in 2020 to 3,362 in 2021. However, the figure is still lower than the 4,235 HNWI reported in 2019. It is expected that by 2026, the number of HNWI in the country will grow to 4,274.

High Net Worth Individuals are described as people with a net worth of at least $1 million (Ksh113 million).

The increase in the number of super-rich individuals in the country is an indicator of an economy that is recovering from the effects of the pandemic, which disrupted business and affected most asset classes in 2020.

Out of the 3,362 HWNI individuals, 908 (27%) of them are aged 40 and below. Out of the 908, 803 of them are self-made, having made their fortunes in sectors like ICT, blockchain, fintech, cryptocurrency, and the metaverse.

This is a significant shift from the past when the majority of HWNI under the age of 40 got into the club of the super-rich riding on inherited wealth. It is also an indicator that there are numerous opportunities for young people in tech and the digital economy.

Meanwhile, the number of the ultra-rich also referred to as Ultra-High Net Worth Individuals (UHNWI) in the country decreased from 90 in 2020 to 88 in 2021. This decrease is an indicator of how difficult it is to add wealth in this segment.

Ultra-high net worth individuals are described as people with a net worth of at least $30 million (Ksh3.4 billion).

To determine whether individuals fall in the HNWI and UHNWI categories, the Knight Frank Wealth Report looks at all their assets, including their primary and secondary residences, fewer liabilities like bank loans.

Close to half (49%) of the wealth held by Kenya’s super-rich is held in local property, but there is an increasing appetite for new asset classes like crypto assets (13%), overseas property (19%), and NFTs (6%).

1 In 3 Super Rich Kenyans Seeking Dual Citizenship

Close to one-third of Kenya’s super-rich (28%) are seeking new nationality or a second passport, according to data from the Knight Frank Wealth Report 2022.

While the percentage of super-rich Kenyans looking for a new nationality is higher than the 15% global average, it is lower compared to the percentage of South Africa’s (31%) and Nigeria’s (44%) super-rich looking for new passports.

According to the report, some of the key reasons why Kenya’s HNWI want new passports include access to better investment opportunities (59%), higher quality education for their children (38%), and better healthcare (34%).

The high number of HNWI individuals looking for a second passport is an indicator that the super-rich are not very confident in the performance of the local economy, as well as local institutions. In the past, it was impossible for Kenyans to hold dual citizenship, but this changed with the promulgation of the 2010 constitution.

Other Money News

  • Kenyans are ditching the usage of cheques in favour of digital payment channels, according to data from the Central Bank of Kenya. In the period between 2011 and 2021, the value of written cheques rose from Ksh2.05 trillion to Ksh2.54 trillion, but the number of written cheques fell to 16.4 million from 18.2 million. Meanwhile, the value of mobile transactions rose from Ksh1.7 trillion in 2011 to Ksh6.87 trillion in 2021.
  • The Kenyan shilling on Thursday fell to a low of 113.889 units to the dollar (CBK mean rate), down from 109.70 just six months ago, leading to an unprecedented increase in the price of imported goods. Already, the average price of imported used cars has increased by about 37% over the last six months.
  • Kenyans looking to get into construction projects should brace for high roofing sheet prices, which have surged partly due to the Russia-Ukraine war. Already, there was decreased supply of steel due to the Covid-19 pandemic, but the war is likely to impact the supply even further, with Ukraine and Russia both being major sources of iron ore and aluminium.

Kelvin is a top-notch writer whose passion is to help businesses maximize their reach and conversion through excellent and engaging content. He has the uncanny ability to make the most complex subject matter simple and easy to understand. You can find Kelvin on Linkedin.

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