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Global economic downturn is taking a toll on remittances by Kenyans in the Diaspora after the funds reduced by 0.7 per cent to Sh38.2 billion

In what was a sixth consecutive dip in remittances from Sh38.5 billion posted in June. Such dips normally have an impact on the economy, as it represents an important source of forex but also support many livelihoods.

Analysis by global payments company, WorldRemit, education, healthcare, and household needs are the main uses of remittances in Kenya. These sectors that tend to have a multiplier effect on development.

Central Bank of Kenya(CBK) noted the United States (US) remains the largest source of remittances into Kenya, accounting for 58 per cent in the period. It contributed Sh22.3 billion ($ 186.5 million) during the month under review compared to Sh25.0 billion ($ 209.1 million) in a similar month last year.

Remittances inflow

“The strong remittance inflows continue to support the current account and the stability of the exchange rate,” said CBK in its weekly bulletin.

After the dip in June, global payment firm WorldRemit that the projected the back-to-school rush is expected to have a major impact on diaspora remittances this month.

The inflows reported in July are the lowest since June last year when the country received 36.6 billion ($306 million)

This amount was almost Sh1 billion lower compared to Sh38.9 billion sent in June and less by a further Sh2 billion, the previous month.

The cumulative inflows for the 12 months to July hit Sh474.8 billion ($3.995 billion) compared to Sh409 billion ($3.44 billion) in the same period last year, an increase of 16.1 per cent.

In a similar month last year, total remittances were $336.7 million (Sh40.3billion), a 5.1 per cent decrease, which means Kenyans living abroad sent less money this year amid elevated global inflation.

WorldRemit data

WorldRemit noted that Kenya is among the top 3 recipients of diaspora remittances in Africa with Nigeria coming first followed by Zimbabwe.

The largest source of diaspora remittances from Africa to Kenya was Tanzania, with Sh466.8 million ($3.9million), followed by Uganda, which contributed Sh311.2 million ($2.6 million), South Africa Sh287.3 million ($2.4 million).