Diaspora remittances defy inflation hit Sh453bn


The Central Bank of Kenya in Nairobi. FILE PHOTO | NMG

Kenyans living abroad defied global inflation and the ripple effects of Russia’s invasion of Ukraine to send home a record high of Sh453.6 billion to family and friends in the eleven months to last November.

The remittances have more than doubled since a similar period in 2017 when Kenyans living abroad sent home Sh215.4 billion, according to Central Bank of Kenya (CBK) data.

Remittances withstood global headwinds last year, growing by nine percent to Sh453.6 billion over the 11 months from Sh416.2 billion a year earlier.

The global fuel prices across Europe and the United States resulted in a rise in inflation and a high cost of living for households and businesses that had been battered by the Covid-19 pandemic.

Last March, Sh44.9 billion received was the highest remittance recorded in a single month in five years, followed by Sh43.8 billion in April and Sh42.7 billion in November.

At the height of the pandemic, Kenyans abroad sent home Sh345.4 billion in the same period in 2020, Sh314.7 billion in 2019, Sh303.3 billion to their kin in 2018 and Sh215.4 billion in 2017.

A reopening of host economies as the Covid-19 pandemic receded supported Kenyan migrants’ employment and their ability to continue helping their families back home.

Rising prices adversely affected their real incomes, according to the World Bank.

The CBK statistics show that North America remains dominant in the amount of money sent by Kenyans, followed by Europe and the rest of the world.

North America (the US and Canada) is the biggest source of remittances to Kenya, accounting for 60.1 percent of the total sum of funds sent into Kenya last year.

Europe contributed 18.1 percent and the rest of the world accounted for 21.8 percent of the total remittances in the period to last November.

The December 2021 diaspora remittances survey by the apex bank revealed that Kenyans sent money for purchasing food and household goods, to offset medical expenses, to meet education expenses, payment of rent, household utilities and farming needs.

Some respondents said more than half of the remittance amounts were allocated to three uses — investment in real estate (land and building) for the recipient, mortgage payment for the sender and purchase of food and household goods.

The strong remittance inflows were expected to support the weakening shilling that had hit record lows against the US dollar.

The shilling fell to Sh122.4 against the greenback, Sh148 against the Sterling pound and Sh127.9 against the euro last November.

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