The Senate has approved a bill that will give Kenyans living in the diaspora special incentives, including wealth protection to encourage them to invest back home.
Senators voted at a special sitting on Tuesday evening to approve the Kenya Citizenship and Immigration (Amendment) Bill, 2021 through its third reading.
The Bill will now be forwarded to the National Assembly for concurrence.
The Bill requires Foreign Affairs Cabinet secretary to craft a voluntary savings scheme for Kenyans living abroad.
The Bill, sponsored by Murang’a Senator Irungu Kang’ata opens the window for Kenyans in the diaspora to form associations and voluntarily contribute to a saving scheme.
“The Cabinet Secretary may liaise with financial institutions in Kenya to negotiate favourable terms on the investments of any contributions that may be made,” the Bill states.
The Bill seeks to amend the Kenya Citizenship and Immigration Act to require the Foreign Affairs Cabinet Secretary, in consultation with the relevant Kenya mission to promote the establishment of a voluntary savings scheme for Kenyans living abroad.
“The Cabinet Secretary, may in consultations with the Cabinet Secretary for Treasury and the governor of Central Bank, develop policies and programmes offering incentives to Kenyans living abroad to invest in Kenya,” the Bill states.
The two Cabinet Secretaries (CS) and the Central Bank governor will be required to establish a database setting out information on programmes and projects in Kenya for investment by Kenyans living abroad.
The Bill requires the CS’s and the governor to put in place measures for the prevention of fraudulent practices that hinder investment, in Kenya, by Kenyans living abroad.
“The Bill proposes to enhance the participation of Kenyans living abroad in the socio-economic development agenda as well as governance processes,” Mr Kang’ata said in the Bill’s memorandum of objects and reasons.
Kenya Diaspora Alliance (KDA), whose membership stands at around 250,000, had earlier told the Business Daily that most Kenyans abroad are worried about the protection of their investment back in the country and usually seek reassurance from authorities and partners before sinking cash into new ventures.
Inflows from the diaspora rose by 20 percent in the nine months to September last year compared to the corresponding period of 2020.
The diaspora remittances increased despite the effects of coronavirus-induced economic fallout in the global economy.
Data from the Central Bank of Kenya (CBK) released in October 2021 shows that the remittances for the nine months to September stood at $2.71 billion (Sh301 billion), up from $2.27 billion (Sh252.5 billion) in the nine months to September 2020.
Remittances are Kenya’s largest source of foreign exchange ahead of horticulture, tea and tourism earnings. They, therefore, provide crucial backing for the shilling in the forex market in addition to the social benefits for recipients.
The CBK has in recent briefings stated that improved remittance channels have helped raise the amount being sent home, largely through the adoption of digital channels that make it easier and cheaper to send and receive money.
The US remains the largest source of remittances into Kenya, accounting for 61.8 percent of the money sent home in September last year.
Asian markets—especially Saudi Arabia and Qatar— are also gaining prominence due to the rising numbers of migrant workers from Kenya.