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Remittances up 50pc to remain top forex earner

A Western Union signage on Kenyatta Avenue in Nairobi. FILE PHOTO | NMG
A Western Union signage on Kenyatta Avenue in Nairobi. FILE PHOTO | NMG 

Remittances by Kenyans living abroad rose 50 per cent in the first four months of the year compared to a similar period in 2017, cementing the inflows’ position as the leading source of foreign exchange in the country.

Latest Central Bank of Kenya (CBK) data show the cumulative inflows in the four months to April stood at Sh86.7 billion ($858.6 million), compared to Sh57.7 billion ($571.2 million) in a similar period in 2017, with the increase mainly backed by huge growth in the dominant North American remittances.

The highest amount of inflow this year—which is also an all-time high—was recorded in March at Sh22.4 billion ($222.2 million) with April recording a slight decline to Sh21.9 billion ($217.1 million).

The higher inflows have helped the shilling’s strong performance against the dollar this year, where it has appreciated by 2.2 per cent.

Kenyans abroad are also increasingly making portfolio investments in the local capital markets.

“Remittance inflows remained resilient despite a 2.3 per cent decline in April 2018. The improved performance reflects increased uptake of financial products by the Diaspora and new partnerships between commercial banks and international money remittance providers,” said CBK in its latest weekly bulletin.

Cumulative inflows

CBK added that the 12-month cumulative inflows increased by 28.7 per cent to Sh225.2 billion ($2.23 billion) in April compared to Sh175.7 billion ($1.74 billion) recorded in April 2017.

North America—mainly the US—continued to contribute the largest share of inflows, the CBK data shows, at Sh47.4 billion in the four months to April, which represents a 72 per cent increase on the Sh27.5 billion remitted in the corresponding period in 2017.

Remittances from Europe rose 46 per cent to Sh27.3 billion, while cash sent home from the rest of the world recorded a smaller growth of 4.3 per cent to Sh12 billion in the four-month period.

Latest CBK data on receipts from other major sources of foreign exchange show that in the 12 months to March 2018, tea inflows rose by 18.2 per cent to Sh148.8 billion ($1.47 billion) and horticulture by 10.5 per cent to Sh90 billion.

Tourism and coffee inflows on the other hand contracted by one per cent to Sh90 billion and 6.9 per cent to Sh21.6 billion respectively in the 12 months.