Dollar inflows from Kenyans in the diaspora have hit a 13-year high, which analysts attributed to the recovery of Developed World economies, raising average incomes of workers.
Diaspora remittances hit the new peak in August with the money sent home by Kenyans working abroad growing 9.26 per cent in the month compared to a month earlier.
The first recorded data, January 2004, showed just over Sh2.5 billion was sent into the country. Monthly numbers released by the Central Bank of Kenya (CBK) last week showed that diaspora remittances reached $166.4 million (about Sh17.18 billion) in August compared to $152.3 million (about Sh15.72 billion) in July.
“This growth can be explained by the significant number of Kenyans living in the diaspora; approximately three million,” said Daniel Kuyoh, a senior investment analyst at Alpha Africa asset managers. “This points to a population that has the capacity to remit substantial funds back home whether for investment or consumption.”
Mr Kuyoh cited a 2014 study that showed the Kenyan diaspora households in the US recorded a high median annual income of $61,000, (about Sh6.3 million) which was $11,000 (about Sh1.13 million) higher than US households.
“Secondly, we have also seen the recovery in the economies of developed markets since the 2008 global financial crisis, meaning there are more opportunities to generate income for the entire population and this increase in remittances could be a direct effect of this economic recovery,” said Mr Kuyoh.
According to a World Bank report Kenya is among the highest recipients of remittances in Africa.
Experts have in the past called for the State to tap into the huge potential of remittances that they say remains untapped.
“The diaspora is the biggest single source of foreign exchange for Kenya,” said Nairobi-based analyst and CEO of Rich Management, Aly-Khan Satchu, in an earlier interview.
“I am surprised that we have not launched a Government of Kenya diaspora bond.”
Diaspora remittances, which have become a key support of the shilling that is under pressure from low export earnings, stood at $154.8 million (about Sh15.99 billion) in June, a drop of 4.1 per cent compared to the $161.5 million (about Sh16.7 billion) recorded in May.
In April the remittances stood at $138.6 million (about Sh14.31 billion) six per cent lower than the $147.5 million (about Sh15.23 billion) recorded in March.