US inflows spur growth to a new record for the third month in a row
Remittances by Kenyans living abroad jumped by nearly one-half in February to hit a new monthly high of Sh21.25 billion ($210.36 million), driven by increased inflows from the US.
Fresh data from the Central Bank of Kenya (CBK) shows the cash rose 47.45 per cent compared to Sh14.41 billion ($142.665 million) a year earlier, a new record set for the third month in a row.
Diaspora inflows in February were slightly higher than Sh21.10 billion ($208.92 million) in January and Sh20.59 billion ($203.82 million in December, which were both historic highs.
Kenyans in North America, largely the US and Canada, sent home Sh11.71 billion ($115.97 million) marking a 77.53 per cent jump from Sh6.60 billion ($65.33 million) in February 2017. It was, however, marginally reduced from Sh11.76 billion ($116.40 million) month-on-month.
North America accounted for 55.13 per cent of the total inflows.
Cash from Europe rose 36.69 per cent year-on-year to Sh6.45 billion ($63.82 million), while remittances from the rest of the world were flat, rising by 0.26 per cent in the period to Sh3.09 billion ($30.57 million).
“Remittances are indeed a wonderful ‘silver bullet’…our inward remittances have been accelerating to fresh all-time highs and speaks fundamentally to Kenya Inc.’s intellectual capital and monetisation thereof,” independent analyst Aly-Khan Satchu, who runs investment advisory Rich Management, said.
An estimated three-quarters of Kenya’s diaspora remittances go into family support such as school fees and medical bills.
Kenya Diaspora Alliance (KDA) chairman Shem Ochuodho argued last November that this could be reversed in favour of investment if citizens abroad were offered incentives such as tax rebates – usually given to foreign investors – to invest back home.
Financial services firms, including commercial banks, have in recent years developed savings and investment products such as mortgages targeted at the diaspora community who have historically favoured real estate.
“The opportunity (for tapping diaspora cash) is surely around creating a bigger and more sophisticated banquet of choices. Increasingly, I am seeing a more granular approach,” Mr Satchu said.