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Currencies

Diaspora inflows seen taking coronavirus hit

Dollar inflows from Kenyans in the diaspora are tipped to decline with analysts blaming ongoing layoffs as the coronavirus pandemic takes a toll.
Dollar inflows from Kenyans in the diaspora are tipped to decline with analysts blaming ongoing layoffs as the coronavirus pandemic takes a toll. FILE PHOTO | NMG 

Dollar inflows from Kenyans in the diaspora are tipped to decline with analysts blaming ongoing layoffs as the coronavirus pandemic takes a toll.

Kenyans living abroad sent home Sh23 billion ($218.9 million) in February, a drop from Sh26 billion in January. This came as the shilling came under pressure to touch 106 units to the dollar.

Last year, cash sent from abroad stood at Sh280 billion.

A staggering 16.8 million Americans lost their jobs in just three weeks, a measure of how fast the coronavirus has brought world economies to their knees, according to a news report by the Associated Press.

More layoffs are expected as the coronavirus crisis drags on around the world.

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“Most of the people filing for unemployment are mostly immigrants. While we have immigrants working in medical services but many others are in informal sector where they own restaurants and businesses,” the African Development Bank deputy director-general for East Africa Nnenna Nwabufo said in a telephone interview.

“Those remittances are not going to be coming,” she added.

Ms Nwabufo said ongoing plans by Kenya to diversify sources of revenue will help blunt the decline in remittances.

“There is a need for diversification…these are long-term development plans African countries need to look at,” she said.

The Washington-based Pew Research Centre says some 90,000 Kenyans are currently living in the US, including as many as 30,000 without authorisation.

Diaspora remittances are a key support of the shilling that has been under pressure from low export earnings, making it a key source of foreign exchange alongside tea, horticulture and tourism.

Prior to the Covid-19 crisis, experts attributed the steady rise in remittances to the recovery of developed world economies.

A 2014 study revealed that Kenyan diaspora households in the US earned a high median annual income of $61,000, (about Sh6.3m), which was $11,000 (about Sh1.13 million) higher than US households.

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