Kenyans abroad remit Sh392.2b in 12 months
Kenyans living abroad sent home a record Sh392.2 billion for the 12 months to September 2021, according to Central Bank of Kenya (CBK) data.
This represents a 19.0 per cent year-on-year growth in such remittance inflows from Sh329.6 billion sent in a similar period in 2020.
The United States remains the largest source of remittances into Kenya, accounting for 61.8 per cent in September 2021.
Diaspora remittances first crossed the $300 million or Sh30 billion mark in May this year, with September figures showing a steady rise in the amount being sent back home as Covid-19 pandemic was seen as a key promoter of that shift.
Remittances in the month of September came in at Sh34.4 billion, an 18.8 per cent jump from Sh28.9 billion last year – even though flows in the period were slightly lower by a single percentage point from Sh34.7 billion a month earlier.
Kenyans in foreign countries sent home a monthly record Sh34 billion ($315.8 million) in May, a 22 per cent jump from the corresponding month last year, supported by higher flows from the US and Saudi Arabia.
Diaspora dollars have remained a key player in providing livelihood to a number of households in the country and an important contributor to the country’s growth and development.
Diaspora inflows have also remained Kenya’s largest source of foreign exchange since 2015.
A study by researchers at the University of Nairobi, for instance, shows that both diaspora remittance and interest rates positively impact the economic growth in Kenya although the effect is not statistically significant at the 90 per cent, 95 per cent and 99 per cent confidence levels.
Central Bank of Kenya conducts a monthly survey on remittance inflows through formal channels that include commercial banks and other authorised international remittance service providers in Kenya.
Inflows from Asia and Gulf countries such as Qatar have also seen gradual rise over the years.
A remittance is money sent by a person in a foreign land to his or her home country.
Due to the huge sums involved, remittances are now being recognised as an important contributor to the country’s growth and development.
Such funds have been increasing rapidly.
Gulf states such as Saudi Arabia, United Arab Emirates, Qatar, and Bahrain have also emerged as important drivers of remittances, in line with the growing number of Kenyans immigrating to these countries in search of jobs.
Tanzania, Uganda, and South Africa lead as the top African source markets for remittance inflows into Kenya.
Remittances not only represent an important source of forex but also support many livelihoods.
Education, healthcare, and household needs are the main uses of remittances in Kenya, according to global payments company, WorldRemit, indicates, sectors that tend to have a multiplier effect on development.
Foreign exchange earners
“Education is likely to remain a key use of remittances, and this will only increase with the packed school calendar post-covid,” said Sharon Kinyanjui, Director Europe, Middle East, and Africa Receive Markets at WorldRemit.
There are an estimated four million Kenyans living and working abroad, according to the Ministry of Labour and Social Protection, with remittances currently being among highest foreign exchange earners apart from tea, coffee and tourism.