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Economy

UN official asks Kenya to cut remittance cost, aid citizens abroad

UN official asks Kenya to cut remittance cost, aid citizens abroad
UN official asks Kenya to cut remittance cost, aid citizens abroad. FILE PHOTO | NMG 

A UN official has challenged the government to reach out to Kenyans trapped in lockdowns abroad and cushion them from the high cost of sending money back home.

United Nations Economic Development for Africa (UNECA) economic division director Stephen Karingi said that by taking such measures, Kenya can protect remittances from dipping.

“The government should reach out to families that cannot access remittance services to send money back home due to total shutdowns in their host countries,” Mr Karingi said in an interview with BBC.

The cost of remittances currently stands at 10.51 percent for Canada, 7.5 from the US, and 6.34 percent for the UK.

According to the World Bank, remittances to Kenya will decline by 20 pecent this year as Covid-19 causes migrant workers to lose wages and jobs.

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World Bank projects that in general terms, remittances to low and middle-income countries will tumble by $109 billion this year, from last year’s $554 billion.

Mr Karingi said the majority of expatriates in the diaspora still have contracts with their employers but the biggest challenge remains the sending of the cash back home.

He called on the government to come up with incentives that reduce remittance charges, “which are too high”.

“To achieve this, there needs to be an investment in digital platforms that are cheaper,” he added.

International remittances are a lifeline for many families in developing countries. However, the global flow of these funds continues to happen largely through informal channels.

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