- Kenya’s diaspora remittances rose by 20 percent in the nine months to September compared to the corresponding period of last year.
- Remittances are Kenya’s largest source of foreign exchange ahead of horticulture, tea and tourism earnings.
- The CBK has in recent briefings stated that improved remittance channels have helped raise the amount being sent home.
Kenya’s diaspora remittances rose by 20 percent in the nine months to September compared to the corresponding period of last year, underlining the resilience of these inflows at a time when the global economy is still recovering from the Covid-led contraction of 2020.
Data from the Central Bank of Kenya (CBK) shows that the remittances for the period stood at $2.71 billion (Sh301 billion), up from $2.27 billion (Sh252.5 billion) in the nine months to September 2020.
Remittances are Kenya’s largest source of foreign exchange ahead of horticulture, tea and tourism earnings. They, therefore, provide crucial backing for the shilling in the forex market in addition to the social benefits for recipients.
While the monthly remittances are much higher than last year, the past two months have recorded a decline from the all-time high of Sh336.7 billion recorded in July, in line with seasonal trends where the inflows ease in the third quarter before picking up at the end of the year.
“Remittance inflows totalled $309.8 million in September 2021 compared to $260.7 million in September 2020, an 18.8 percent increase…inflows in September (however) declined marginally by one percent compared to $312.9 million in August, in line with seasonal factors,” said the CBK in a weekly bulletin.
The CBK has in recent briefings stated that improved remittance channels have helped raise the amount being sent home, largely through the adoption of digital channels that make it easier and cheaper to send and receive money.
Earlier this year, the apex bank rolled out a survey on the remittances, seeking to establish among other things the efficiency and cost of alternative remittance channels, difficulties of remitting money, the availability of information to Kenyans in the diaspora about investment and the use of remittances.
The Central Bank is, however, yet to publish the findings of the survey, which will help guide policy and find ways of boosting remittances in supporting the economy and livelihoods. The US remains the largest source of remittances into Kenya, accounting for 61.8 percent of the money sent home last month.
Asian markets—especially Saudi Arabia and Qatar— are also gaining prominence due to the rising numbers of migrant workers from Kenya.