Kenyans working abroad continued to send money home, providing relief to many low-income households in the country. In the first seven months of this year, the overseas remittances reached KSh230 billion ($2.1 billion) up from KSh190 billion ($1.73 billion) in the same period last year, according to data from the Central Bank of Kenya (CBK).
July registered the highest amount of inflows ever recorded in Kenya, in a month, at $336.7 million, up from $305.9 million in June and $277 million in July 2020.
The US is the largest source of remittances into Kenya, followed by the UK, Saudi Arabia, and Germany. In July this year, diaspora remittances from the US reached $196 million, equivalent to 58.3% of all remittances into Kenya that month.
Tanzania is the leading source of remittances into Kenya among African countries. In June, remittances from Tanzania amounted to $4.02 million, accounting for 28% of the total remittances from African nations.
In 2020, diaspora remittances into Kenya reached an all-time annual high of $3.1 billion (KSh 340 billion) even as other African nations recorded massive declines in remittances due to the challenges posed by the pandemic. A report by the World Bank and Knomad showed that in 2020, foreign remittances to Sub-Saharan Africa declined by 12.5% to $42 billion mainly due to the movement restrictions introduced around the globe and a rise in unemployment in most host nations.
Analysis by global payments company WorldRemit shows that education, healthcare, and household needs are the main uses of remittances in Kenya.
“Education is likely to remain a key use of remittances, and this will only increase with the packed school calendar post-covid,” says Sharon Kinyanjui, Director of Europe, Middle East, and Africa Receive Markets at WorldRemit. “Affordability and convenience remain the top priorities for most people sending and receiving money across borders. Over the past year, we’ve focused on meeting these priorities and ensuring an affordable service for our customers,” she adds.
Kenya heavily relies on diaspora remittances as a source of foreign exchange and for economic development. In addition, the funds enable low-income earners to pay for education and healthcare.
Remittances are projected to surpass the record set in 2020, as the Central Bank continues to work with the diaspora community to increase inflows into the country.