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Technology To Provide Platform For Kenya’s Next Millionaires
Players in the technology space are more likely to become millionaires in the next five years compared to other sectors.
This has been attributed to the vast oppotunities that will be created by the crypto currency and blockchain world.
According to the 2022 Wealth Report from Knight Frank the new technology is considered the largest oppotunity in wealth creation.
A major reason for Crypto’s widespread adoption in Africa has been its ability to bridge the economic gap, fulfilling both personal and entrepreneurial needs including remittance, e-commerce, payments, wealth preservation, and social good.
“The money that people in tech goes back into their businesses so they can make that jump from being a millionaire to an ultra high net worth individual, that’s where a lot of this newly created tech wealth will go,” said Andrew Shirley, editor of The Wealth Report at Knight Frank.
The report further revealed that from the number of Ultra Wealthy Individuals in Kenya 13 percent are investing in crypto assets.
” We’ve seen lots of technological leap frogs in Kenya, for instance, M-PESA, has meant a lot of Kenyans don’t have a bank account or may never have a bank account.I think and blockchain in particular, be a very interesting way of transferring title and properties without going through all the hurdles that one has to go through,” noted Shirly
In 2021 Kenyas dollar millionaires dropped by 2 percent emerging in a year of relatively hard economic times in the country, with two more billionaires expected in Kenya in the next five years.
However a majority of Kenya’s millionaires have cited succession as a threat to their wealth.
Ben Woodhams, Knight Frank Kenya Managing Director says that Kenya’s dollar millionaires have identified climate change as a great threat to their wealth, with 84 percent citing the global environmental change as a financial risk, compared to 54 percent worldwide, and 64 percent across the rest of Africa.
“Last year’s attitude’s survey did not identify climate change as a wealth risk, making for a rapid shift in risk perception from Kenya’s High-Net-Worth Individuals, because Kenyans are living on the frontline of these environmental changes, making them far more conscious of the environmental impact than many western investors,” noted Andrew Shirley.
In addition to concerns about climate change, Kenya’s wealthy remain more worried about new variants of Covid-19 than HNWIs in other regions.
“We see from this survey the awareness by Kenya’s HNWIs that any infection that afflicts the broad population will also be a direct threat to their own wealth as a result of the economic effects of the pandemic,” said Woodhams.
Kenyan millionaires also perceive greater threats from the country’s challenges with global trade after the disruptions caused by the Covid-19 pandemic to supply chains and globalised flows and relationships.
Some 63 percent of Kenyan HNWIs now view supply chain disruption as a potential threat to their wealth, compared with 55 percent worldwide – with businesses, everywhere, acutely aware of the high impact that any supply disruption can cause to economic outcomes.
More exceptionally, Kenyan millionaires report greater concerns about succession than the norm.
“The transfer of wealth to the next generation is a key moment of vulnerability for HNWIs worldwide, as poorly managed successions can lead to rapid wealth depletion. In Kenya, however, with frequent evidence of succession disputes and even protracted court cases, the threat is made greater through the degree of challenge in simplifying or accelerating the outcome of such disputes,” said Andrew.
This has seen 31 percent of Kenya’s millionaires , compared with a global average of 20 percent.