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Diaspora remittances record softest growth in 15 years
Besides the US, other key remittance source countries include Germany, the United Arab Emirates (UAE), Australia, Canada, Tanzania, and the United Kingdom.
Cash sent home by Kenyans living and working abroad grew 1.9 percent in 2025 to $5.04 billion (Sh649.5 billion), marking the slowest annual expansion in diaspora remittances since the aftermath of the 2008 global financial crisis.
New data from the Central Bank of Kenya (CBK) shows remittance inflows rose from $4.9 billion (Sh631.9 billion) in 2024, extending a decade-long growth streak, but at a pace unseen since 2009.
The subdued growth underscores rising pressures on migrant incomes and transfer channels, even as diaspora inflows remain Kenya’s largest and most stable source of foreign exchange earnings.
The latest remittance slowdown to comparable levels was in 2009, when inflows dipped 0.4 percent to $609.2 million (Sh78.6 billion at current conversion rates), down from $611.2 million (Sh78.8 billion) the prior year, following the global recession triggered by the 2008 financial crisis.
The inflows have surged consistently over the past 15 years, often posting double-digit growth rates as Kenya’s diaspora expanded and digital transfer platforms reduced transaction costs.
CBK data shows Kenyans abroad sent home an average of about $420 million (Sh54.2 billion) per month in 2025, keeping inflows above the $400 million (Sh51.6 billion) mark despite tightening global economic conditions.
“Total remittances increased by 1.9 percent in 2025 to $5.04 billion compared to $4.9 billion in 2024. Remittance inflows remain a key source of foreign exchange earnings and continue to support the balance of payments,” said the CBK in its latest release.
The slowdown comes at a time when other external inflows, including foreign direct investment (FDI) and export earnings, remain under strain from weak global demand and elevated financing costs.
The sluggish growth in inflows reflects mounting uncertainty in key labour destination markets, particularly the United States, which accounts for the largest share of remittances into Kenya.
The US economy faced slower job creation in several migrant-heavy sectors in 2025, as policy uncertainty continued to weigh on income security for foreign workers.
The return to office of President Donald Trump coincided with stricter immigration enforcement and labour market scrutiny, raising anxiety among migrant workers and dampening remittance momentum.
US lawmakers further approved legislation introducing a 3.5 percent excise tax on outbound remittances, a move expected to increase the cost of sending money abroad once implemented.
A recent Business Daily analysis shows the levy could see the US government collect about $131.5 million (about Sh17 billion) annually from remittance transfers linked to Kenya alone.
The money wired home continues to finance common household needs such as food consumption, school fees, healthcare costs, housing construction, as well as small business activity across the country, among others.
The inflows also help to cushion the local currency by boosting foreign exchange supply, aiding the country meet external debt repayments and foot import bills.
Besides the US, other key remittance source countries include Germany, the United Arab Emirates (UAE), Australia, Canada, Tanzania, and the United Kingdom.
The President William Ruto’s government has continued to push labour export programmes, positioning overseas employment as a tool to ease domestic joblessness and support foreign exchange inflows.
