NSSF eyes piece of Sh350 billion diaspora inflows

The National Social Security Fund (NSSF) has set sights on a piece of the nearly Sh350 billion-a-year inflows from Kenyans abroad with a tailored savings plan.

NSSF Managing trustee Anthony Omerikwa said the state-owned pension fund has conducted a survey on the diaspora community to help inform the introduction of the savings product.

“We did a survey last week and we are awaiting the outcome. The survey will help us start targeting on annual basis,” Dr Omerikwa said.

“In the preliminary outcome, we realised that some people in the diaspora already have a pension plan working for them. They have bought into some annuity packages locally.”

Financial service firms such as commercial banks and fund managers have in recent years developed savings and investment products targeted at the diaspora community who have historically favoured real estate assets.

NSSF, which currently holds about Sh284 billion in assets, on October 26 signed a memorandum of understanding with Kenya Diaspora Alliance (KDA) — an umbrella body representing groups of Kenyans living abroad.

“We want to tap into their (KDA) network and database to encourage people to remit their money here (NSSF). Internally, we have upped our system capability where you don’t even need to have a smartphone remit your savings,” Dr Omerikwa said.

Steadily-growing Kenyans in foreign countries have since 2015 remained the top source of foreign exchange, partly buoyed by growth in tailored investment products and cheaper remitting options via mobile phones.

At nearly $2.71 billion (Sh301.96 billion) in the first nine months of the year, the diaspora remittances dwarfed Sh270 billion Kenya earned from its key farm exports last year — horticulture (Sh116.41 billion), tea (Sh130.27 billion) and coffee (Sh22.98 billion).

KDA estimates about three-quarters of the inflows, however, go into supporting family expenses such as school fees and medical bills, with the remainder going into investments in what very little going into investments.

Dr Shem Ochuodho, the KDA global chair, insists this could be reversed in favour of direct investments if the citizens abroad were offered incentives such as tax rebates – usually given to foreign investors – to invest back home.

Central Bank of Kenya earlier in the year also partnered with Foreign Affairs Ministry and the Kenya National Bureau of Statistics (KNBS) in conducting a poll diaspora to understand the cost and channels of sending cash back home.