Capital Markets

Diaspora inflows up Sh18bn despite pandemic shocks

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Central Bank of Kenya (CBK). FILE PHOTO | NMG

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Summary

  • The remittances hit Sh247.35 billion ($2.27 billion) in the January-September period compared with Sh228.79 billion ($2.10 billion) in a similar period in 2019, Central Bank of Kenya (CBK) statistics show.
  • Despite projections of a sharp fall by analysts, including those from the World Bank Group, the inflows to Kenya have continued to grow year-on-year, except in April and June when they dropped 15.16 percent and 2.3 percent, respectively.

Cash sent home by Kenyans abroad in the first nine months of the year rose by 8.12 percent, or Sh18.57 billion, defying projections of a global coronavirus-induced fall and giving a lift to the shilling amid exports slowdown.

The remittances hit Sh247.35 billion ($2.27 billion) in the January-September period compared with Sh228.79 billion ($2.10 billion) in a similar period in 2019, Central Bank of Kenya (CBK) statistics show.

Despite projections of a sharp fall by analysts, including those from the World Bank Group, the inflows to Kenya have continued to grow year-on-year, except in April and June when they dropped 15.16 percent and 2.3 percent, respectively.

The World Bank’s forecast in April was largely based on assumption that migrant workers will be hardest hit by job losses and pay cuts across the globe because of economic fallout as a result of coronavirus pandemic.

The CBK data shows inflows from major source countries in North America (largely the US) — which account for more than half of total remittances to Kenya — continued to swell by double-digits throughout the year except in March and April when they grew 9.34 and 2.58 percent, respectively.

Analysts said the more than $3 trillion new spending, including stimulus cheques to homes in the US and emergency loans and grants to businesses, assuaged steep job losses and helped keep remittances taps from the US flowing steadily.

“There was a lot of payroll support in the first phase of the stimulus in the US… and that sort of did not entirely impact the inflows from Kenya’s biggest source,” NCBA Group chief economist Raphael Agung’ told the Business Daily.