Kenyans working and living abroad sent home a record KES 498.8 billion last year, official data shows. Diaspora remittances were 8.34 per cent higher (the equivalent of KES 38.39 billion) than the KES 460.41 billion sent a year before in 2021, according to the weekly Central Bank of Kenya (CBK) weekly bulletin.
The rise in diaspora remittances defied varied projections that the remittances by Kenyans would drop in the face of rising global prices, which have adversely affected migrants’ real incomes and piled pressure on the budgets for Kenyans in the diaspora.
A recent survey by WorldRemit revealed that at least half of Kenyans living abroad have taken up side hustles since the Covid-19 pandemic struck to sustain remittances back home. This follows inflation in major global economies.
“Remittance inflows in 2022 reached an all-time record of $4.028 billion (KES 498.8 billion), an increase of 8.3 per cent compared to $3.718 billion (KES 460.4 billion) in 2021,” said CBK
The inflows were strong in December 2022 at $357.3 million (KES 44.2 billion), an increase of 3.4 per cent compared to $345.4 million (KES 42.7 billion) in November.
CBK data shows Kenyans working in the US remain the largest contributors to the remittances sending more than half of all the contributions.
“The US remains the largest source of remittances into Kenya, accounting for 55.5 per cent in December,” said the CBK
The Apex bank further noted that record remittances earned helped shore up the country’s foreign currency, which has come under pressure in recent months due to the rising rate of the dollar against the Kenyan shilling.
The usable foreign exchange reserves stood at $7.415 billion (KES 918.2 billion), representing 4.15 months of import cover as of January 12, 2023, which is lower than the $7.537 billion (KES 933.3 billion) (4.22 months of import cover) reported earlier on December 2022 by the CBK.
“Remittance inflows continue to support the current account and the foreign exchange market,” said the CBK.
According to worldRemit, Education, healthcare, and household needs are the main uses of remittances in Kenya, which tend to have a multiplier effect on development.
Digitization remains a key driver for the growth of remittance services, according to WorldRemit, which has partnered with local banks, allowing the direct sending of money to accounts and M-pesa.
Read also; Diaspora Remittance Rise by 9%, Hitting a Record High of KES 453 Billion.
