Kenya Experiences a Surge in Diaspora Remittances from African Nations

Kenya has witnessed a remarkable 42 percent increase in Diaspora remittances originating from African countries over the past seven months. This growth comes as more Kenyan citizens seek employment opportunities, particularly within the African continent.

According to data from the Central Bank of Kenya (CBK), between January and July of this year, Kenyan expatriates residing in other African nations sent back a total of at least $164.4 million (Ksh22.2 billion). This figure represents a substantial rise from the $116 million (Ksh15.6 billion) recorded in the same period last year.

This surge in remittances is notably higher compared to other continents, particularly North America and Europe, which have been grappling with elevated levels of inflation. In the US, inflation averaged eight percent, while the UK recorded a rate of 7.9 percent during this period.

The primary driving force behind Kenyans seeking opportunities abroad is the pursuit of “greener pastures,” whether in terms of employment or education.

Sources suggest that countries such as Uganda and Zambia are increasingly seen as attractive destinations for Kenyan expatriates. Remittances from Zambia more than doubled, experiencing a remarkable 136 percent growth to reach $5 million. Uganda followed closely with a 113.5 percent increase in remittances sent back home by Kenyan citizens.

Although inflation in the US eased to 3.2 percent in July, the cumulative inflows over the seven-month period resulted in a 1.6 percent decrease, amounting to a decline of $22 million to $1.36 billion.

It’s important to note that remittances represent the largest source of foreign exchange inflows into Kenya, surpassing earnings from other sectors such as tourism ($1.85 billion), tea ($1.13 billion), and horticulture ($1.1 billion) recorded last year.

The rise in global inflation, driven by geopolitical tensions, prompted the United States to raise its interest rates. This, in turn, led to contractionary global monetary policies and a preference for government securities as investment assets, ultimately reducing inflows into Kenya.

Meanwhile, Qatar experienced a notable decline of 38.4 percent, totaling $31.9 million, while remittances from Oman saw a 68 percent drop, amounting to $1.1 million. South Africa also posted a significant decrease, with remittances halving from $13.5 million in the January-July period of the previous year to $6.3 million.