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Kenyan’s in the diaspora sent home $357 million (Sh48 billion) last month, which was a 15 per cent increase from the $309 million (Sh41.6 billion) remitted as of February 2023.

Cumulatively, inflows for the 12 months to March 2023 totaled $4,020 million (Sh541 billion) compared to $3,912 million (Sh526 billion) in a similar period in 2022, underlying the critical role of remittances in bettering the lives of Kenyans amid rising inflation currently at 9.2 per cent.

“The US remains the largest source of remittance into Kenya, accounting for 58 per cent,” Central Bank of Kenya (CBK) said in its weekly bulletin dated April 14, 2023.

Remittances are private savings of workers and families abroad, who sent the money to their relatives in Kenya to spend on food, clothing and other expenditures, and which drive the home economy.

Important contributor

Due to the huge sums of money involved, remittances are now being recognised as an important contributor to the country’s growth and development. The strong inflows help bridge the account deficit in the wake of arising import bills and stabilise the weak shilling as well as preserve dwindling foreign exchange reserves that stood at Sh6.8 billion as of end of last week, equivalent of 3.56 months of import cover.

As of January this year, diaspora remittances was the country’s largest foreign exchange (forex) earner than each of other major exports including coffee, tea and horticulture.

Data from Central Bank of Kenya (CBK), shows that diaspora remittances last year stood at $4,027 billion, against exports worth $5.77 billion. In 2022, tea exports earned Kenya $1.2 billion, followed by horticulture at $521 million and coffee $301 million.

The increased remittance continues to defy projections of a drop, in the face of rising global inflation, which has adversely affected budgets for Kenyan’s working abroad.

A survey by WorldRemit, revealed that half of Kenyans living abroad are now engaging in side jobs to sustain the remittances flows to beat the inflationary pressures.

WorldRemit is digital platform that provides international cross border money transfer and remittance services.

Digitisation remains a key driver for the growth of remittance services, according to WorldRemit, which has partnered with local banks, allowing the direct sending of money to accounts and M-pesa.

To underline the importance of the diaspora community, President William Ruto in 2022 formed the Department for Diaspora Affairs in the Ministry of Foreign Affairs to address issues that concern Kenya’s Diaspora community who form an integral part of the Kenyan economy and social fabric.

In the review period, the US was the largest source of remittance into Kenya, accounting for 58 per cent. Other than the US, other leading sources of diaspora remittance include the United Kingdom, Germany and Saudi Arabia. 

Slowest growth

A recent report by the World Bank has ranked Kenya among Africa’s top three recipients of diaspora remittances, behind Nigeria and Ghana, even as the continent recorded the slowest growth compared to other continents in 2022.

According to the report, Kenya received $4.1 billion (Sh503 billion) as of November 2022, while Nigeria got $20.9 billion (Sh2.6 trillion) and Ghana $4.7 billion (Sh577 billion).

In January, Kenyans working and living abroad sent home Sh43.7 billion, a 3.2 per cent rise in remittances compared to the Sh42.4 billion they sent during the same month in the previous year.