Diaspora remittances by Kenyans living and working in South Africa have posted a recovery after years of subdued performance in the post-pandemic period largely on difficulties in getting work permits for skilled workers despite a visa-free deal between the two countries.
Official data shows the inflows from South Africa more than doubled in the first nine months of 2024 compared with a year earlier but remained more than nine times lower than four years ago.
This is after Kenyans in Africa’s most advanced economy wired home $18.28 million (about Sh2.36 billion) between January and September, a 127.50 percent jump over $8.04 million (Sh1.04 billion) in a similar period last year.
The inflows are, however, more than nine-fold ($188.29 million or Sh24.29 billion) in the same period of 2020, according to data tracked by the Central Bank of Kenya.
The diaspora community in South Africa says the majority of Kenyan workers who returned home at the height of the pandemic have struggled to have their jobs back.
Kenya Diaspora Alliance (KDA), the umbrella body for Kenyans in foreign countries, says there have been cases of skilled Kenyans who previously worked for reputable organisations in South Africa, including universities, failing to have their visas renewed in the post-pandemic period.
This has forced them to leave, cutting the diaspora cash flows from South Africa to support families and friends back home and local investments.
“Kenyans are facing a lot of challenges when they come to the Immigrations (Home Affairs) department. It is not easy here in South Africa for Kenyans to get relevant documentation,” KDA chair Shem Ochuodho told the Business Daily via WhatsApp, citing responses from members in South Africa.
“It gets to a point where some Kenyans stay indoors without working which results in poor investment back home. And it is true there is an increase of Kenyans in South Africa going back home for various reasons which include to use experience and knowledge acquired in SA to exploit economic opportunities in Kenya.”
The difficulties in getting work visas have reportedly persisted nearly two years after South Africa’s President, Cyril Ramaphosa, announced Pretoria will gradually ease immigration rules for Kenyan traders and workers.
Under the agreement with counterpart William Ruto on November 9, 2022, in Nairobi, Kenyans were allowed to visit South Africa visa-free for 90 days from January 2023.
South Africans have since 2017 been getting free visas on arrival to Kenya for stays of up to 30 days in a policy shift made by Dr Ruto’s predecessor, Uhuru Kenyatta, who initiated talks for visa-free travel between the two countries when he visited South Africa in 2016.
South Africa previously charged Kenyans for visa and required them to prove they had sufficient cash in their accounts and return tickets.
The fall in remittances by Kenyans in South Africa has seen them leapfrogged by Tanzania and Uganda as the top source in Africa post-pandemic.
Dollar inflows from Kenyans in Tanzania, for example, stood $56.97 million (Sh7.35 billion) in the nine-month period ended September 2024, a measly 1.97 percent rise over $55.87 million (Sh7.21 billion).
The CBK data further shows diaspora flows from Uganda amounted to nearly $47 million (Sh6.06 billion), a modest 4.98 percent growth over $44.77 million (Sh5.78 billion) a year ago.
Kenyans in Tanzania controlled a 21.11 percent share of $269.89 million (Shj34.82 billion) of total remittances from Africa in the review period from 9.20 percent in 2020, while Uganda’s share was 17.41 percent from 6.01 percent four years ago.
South Africa’s share of the remittances from Africa has, on the other hand, dipped to 6.77 percent from the 65.83 percent peak in 2020, according to the CBK data.
“Another reason is that some investments in South Africa have a higher return, say in real estate, and many Kenyans prefer to invest in SA,” KDA said.
“It is also worth noting that many Kenyans doing business in SA have businesses in Kenya. There is, therefore, a lot of money that is exchanged via M-Pesa, and these sorts of transactions have become massive.”
Diaspora remittances are the largest source of foreign exchange ahead of tourist receipts as well as tea and horticultural exports.
Kenyans abroad typically send money to help their families offset bills like school fees and medical expenses as well as invest in projects like real estate.
