Kenyans working in the US, Europe, and other parts of the world sent home record amounts of money in 2020 contrary to analysts expectations of a drop in diaspora remittances. The big jump in remittances, although unexpected, supported many Kenyan families struggling from the effects of the pandemic.
Foreign remittances climbed to a record high of $2.8 billion in the first 11 months of 2020, compared to $2.55 billion sent in the same period in 2019, a 10% jump.
In April last year, World Bank predicted that remittances to African nations such as Kenya, Nigeria, South Sudan, and Ghana would fall drastically due to a surge in unemployment rates in the US and other European nations.
Remittances from North America hit an all-time high of $1.56 billion in the 11 months period, making up 56% of all diaspora remittances into Kenya in the period under review. However, remittances from Europe fell by 22% to $477 million in the 11 months through November, from $613 million in the same period in 2019. Funds from other parts of the world increased to $756 million at the end of November, from $715 million a year earlier.
Kenya’s foreign exchange reserves, which heavily rely on diaspora remittances, fell by 11% in 2020 to $7.75 billion at the end of December 2020, from $8.758 billion in the first week of January. The forex reserves are useful in supporting the economy in times of crisis, repaying foreign debt, and propping up a depreciating currency.