Diaspora post Sh300b on recovery
Diaspora remittances to Kenya surged by 19 per cent growth with over Sh300 billion received on the back of global economic recovery.
According to World Bank data, Kenya was the third largest recipient of remittances in Africa during the review period, falling behind Ghana and Nigeria.
“The country recorded more than 15 per cent annual growth in receipts from 2015 through 2021, with a robust 19 per cent gain in the current year,” the World Bank said in its latest brief on migration and development.
Cost of remittances
The sector was a key source of support during last year’s pandemic when many people lost their sources of incomes due to Cvid-19 containment measures. Remittances brings to Kenya triple the amount Kenya earns from horticulture, tea and tourism.
The cost of remittances however remains high despite recent improvements which Central Bank of Kenya (CBK) said have helped to boost inflows.
Central Bank of Kenya (CBK) data shows that remittances rose by 20 per cent during the first nine months of 2021 compared to the same period last year.
The remittances for the period hit Sh301 billion up from Sh252.5 billion in the nine months to September 2020.
The cost of sending money however remains high in Kenya due to the fact that diaspora citizens spend a huge chunk as transfer fees.
“Sub-Saharan Africa remains the costliest region to send remittances where costs averaged 8 per cent during the first quarter of 2021, down from 8.9 per cent from first quarter of 2020. The cost of remitting from the United States to Kenya amounts to 6.7 per cent, and from France to Cameroon it is 3.5 per cent,” the report notes.
Surge in migrations
Sending money from Tanzania to Kenya costs a whopping 7.6 per cent while sending money from Tanzania to Uganda is the most expensive at 23 per cent.
Kenya’s rising remittances are backed by the migration of highly skilled people to the United States.
The report applauds the resilience of Kenya’s immigrant workers that have managed to keep inflows growing despite difficult economic conditions last year.
“Strong performances in Ghana (5.9 per cent gain to $4.3 billion), Kenya (9.2 per cent advance to $3.1 billion), and Zimbabwe (31.2 per cent hike to $1.2 billion) provided a foundation for regional receipts in 2020,” said the World Bank.