Kenya’s diaspora remittances hit a high of US$315m in May 2021

KENYA – Kenyans in foreign countries sent home a monthly record US$315.8 million in May 2021, a 22 percent jump from the corresponding period a year earlier, supported by higher flows from the US and Saudi Arabia.

This is the first-time diaspora remittances to Kenya have crossed the US$300 million mark, continuing to defy expectations of a dip due to the Covid-19 pandemic.

According to data from Central Bank of Kenya, inflows from Asia jumped 12 percent month-on-month to US$32.6 million, while remittances from North America—which includes the US, Canada and Bahamas— grew six per cent to US$193.5 million.

Remittance from European countries grew three per cent to US$65.8 million)while Africa stayed flat at US$13.5 million.

“Remittance inflows increased to US$315.8 million in May 2021, compared to US$258.2 million in May 2020, representing a 22.3 percent increase,” Central Bank of Kenya (CBK) said in its weekly markets bulletin.

“The United States continues to be the largest source of remittances to Kenya, accounting for 57.8 percent of remittances in May 2021.”

There is, however, growing prominence of dollars from Western Asia, especially Saudi Arabia, from where Kenyans sent home Sh1.62 billion in May.

This is due to increasing migrant Kenyan labour to the region, including domestic workers, doctors, university lecturers, consultants, bankers, engineers, nurses and hotel managers.

At the onset of the pandemic, it was feared that diaspora dollars would take a hit as millions of people lost jobs when some lockdown measures were imposed.

“Our target is to reduce the cost of transferring funds to Kenya to between two and three percent of the funds transferred in order to increase Diaspora remittances”

Patrick Njoroge – Governor, Central Bank of Kenya

However, massive support by rich countries to their populations helped reduce the impact of the job cuts and helped Kenyans in the diaspora send even more money back home to help their relatives cope with the pandemic.

The cumulative inflows in the 12 months to May 2021 totalled US$3.365 billion.

Kenya relies heavily on diaspora remittances as a major source of foreign currency. Remittances also play a vital role in providing livelihood to low-income households in the country.

Due to the central role of remittances in Kenya, the Central Bank of Kenya (CBK) is working with the Kenya National Bureau of Statistics, the Ministry of Foreign Affairs, and Kenyans in the diaspora to ease the process of remitting funds and therefore boost the amount of diaspora remittances into the country.

During a meeting between CBK officials and representatives of Kenyans abroad, CBK Governor Dr Patrick Njoroge said, “Our target is to reduce the cost of transferring funds to Kenya to between two and three percent of the funds transferred in order to increase Diaspora remittances.”

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.