Cash sent home by Kenyans abroad rose a modest 3.78 percent to Sh117.56 billion ($1.15 billion) in the first five months of the year compared with a year earlier, fresh official statistics show.
This is after some Sh24.75 billion was remitted in May, slightly reduced from Sh24.96 billion in April, Central Bank of Kenya (CBK) says in its latest weekly bulletin.
Last month’s diaspora inflow was Sh1.12 billion less than previous month’s Sh25.87 billion ($245 million), partly reflecting diminishing impact of the tax pardon extended to Kenyans who repatriate wealth stashed in foreign countries.
“The remittance inflows remained strong in May amounting to $243 million compared to $245 million in April,” CBK wrote in the weekly bulletin. “The 12-month cumulative inflows to May 2019 increased to $2,739 million (Sh279.02 billion) from $2,327 million (Sh237.05 billion) in the 12 months to May 2018, reflecting 17.7 percent growth”
Diaspora remittances have since 2015 remained the top source of foreign exchange largely buoyed by a growth in investment products targeting the diaspora community and cheaper remitting options via mobile phones.
Financial services firms such as commercial banks and fund managers have in recent years developed savings and investment products targeted at the diaspora community who have historically favoured real estate.
At Sh270.26 billion in 2018, the diaspora remittances were more than tourism receipts (Sh157.36 billion in 2018), horticultural exports earnings (Sh153.68 billion) and tea (Sh140.86 billion).
Kenyans abroad also remitted more than Foreign Direct Investment (FDI), which the United Nations Conference on Trade and Development (UNCTAD) estimated at Sh164.84 billion, 27.53 percent higher than in 2017.
Increased dollar inflows from citizens in foreign countries has partly helped ease pressure on the shilling this year by supporting the supply side of the dollars against demand by importers shipping in goods and companies paying expatriates and dividends to foreigners.