Currencies

November diaspora inflows defy virus to hit Sh27.9bn

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Diaspora Kenyans shrugged off Covid-related job losses to send home Sh28 billion in November. FILE PHOTO | AFP

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Summary

  • Although the month-on-month total fell compared to October (Sh28.5 billion), the performance of the remittances has remained strong since July, averaging above last year for the second half of 2020.
  • The money sent home had dipped between February and April as the major source markets went into lockdowns to fight the Covid pandemic, but there has been steady recovery since May.

Diaspora Kenyans shrugged off Covid-related job losses to send home Sh28 billion in November, nearly a fifth higher compared to the corresponding month last year.

Although the month-on-month total fell compared to October (Sh28.5 billion), the performance of the remittances has remained strong since July, averaging above last year for the second half of 2020.

The money sent home had dipped between February and April as the major source markets went into lockdowns to fight the Covid pandemic, but there has been steady recovery since May.

“Remittance inflows remained strong in November amounting to $257.7 million (Sh27.96 billion) compared to $218.8 million (Sh23.74 billion) in November 2019, an increase of 17.7 percent. The cumulative inflows in the 12 months to November totalled $3.045 billion (Sh330.4 billion) compared to $2.79 billion (Sh302.7 billion) in the 12 months to November 2019,”said CBK in its latest weekly bulletin.

Remittances are Kenya’s biggest foreign exchange source, ahead of tourism receipts, horticulture, tea and coffee exports.

This year, tourism receipts have fallen massively due to the travel disruptions caused by Covid-19 containment measures, while agriculture export earnings have grown despite supply hitches, largely due to higher prices.

Partly due to the resilience of the remittances, the current account deficit—the balance between the country’s foreign exchange inflows and outflows— narrowed to 4.9 per cent by the end of October from 5.3 per cent at the end of October 2019.

The inflows have remained strong over the period despite predictions by the World Bank of a 23.1 percent fall in remittances to sub-Saharan Africa in 2020 due to Covid-related wage cuts and loss of employment.