•Money sent home by over 200 million migrant workers around the world this year is expected to reach $630 billion, providing a lifeline for more than 800 million family members.
•In 2021, remittance flows to low and middle-income countries (LMICs), grew by 8.6 per cent despite the Covid pandemic to hit $553 billion (Sh64.6 trillion).
The aggregated remittance flows to low and middle-income countries are expected to reach $5.4 trillion (Sh633.7 trillion) by 2030, a figure equivalent to twice the GDP of Africa in 2021, a new report shows.
The International Fund for Agricultural Development (IFAD) has projected growth to be spurred on by digitalization particularly through mobile channels.
"Digitalization reduces fees and other transactions costs like travel time, making the process more convenient and safer while promoting digital and financial inclusion,” Gilbert F. Houngbo, IFAD President said.
In 2021, remittance flows to low and middle-income countries (LMICs), grew by 8.6 per cent despite the Covid pandemic to hit $553 billion (Sh64.6 trillion).
During the same period, Kenyans living and working abroad sent home a record Sh421.6 billion ($3.718 billion)–Central Bank of Kenya (CBK) data.
Money sent home by over 200 million migrant workers around the world this year is expected to reach $630 billion, providing a lifeline for more than 800 million family members.
The aggregated flows of family remittances to LMICs are expected to reach US$5.4 trillion by 2030,
Even so, the upward trend of remittances growth is likely to moderate in 2022 as inflation erodes wages while pandemic-related support programmes end in rich countries.
The war in Ukraine is also expected to impact global figures, as it is triggering a sharp decline in transfers to Russia’s neighbouring countries, where remittances can account for as much as 30 per cent of their GDP.
According to the analysis by IFAD, the African remittance market remains the most expensive, with an average cost of 7.83 per cent against the global average of six per cent.
Reducing the cost to the three per cent goal agreed in the Sustainable Development Goals (SDGs) would lead to an additional US$4 billion per year being received by migrant families in Africa. Mobile transfer costs are already in line with the SDG target of 3 per cent.
Kenya is ranked third among the biggest recipients in Sub-Saharan Africa, after Nigeria and Ghana.
The East African economic powerhouse is also leading in the adoption of mobile remittances, according to new MobileRemit Index prepared by IFAD, which measures preparedness to take advantage of the growing digitalization of remittances.
Central Bank data shows Kenyans living abroad sent more money in the month of March compared to February, as remittances continue to support the current account and the stability of the exchange rate.
In March, inflows hit a record monthly high of $363.6 million (Sh42.2 billion.
This was up from $321.5 million (Sh37.3 billion) sent in February, with the strong dollar against the shilling giving receivers more cash back at home.
Apart from the US, the Middle East has been identified as one of the key drivers of inflows to Kenya as the number of Kenyans securing jobs in the region continues to rise.
The gulf states include Saudi Arabia, United Arab Emirates, Qatar, and Bahrain, key destinations for domestic jobs.
The number of Kenyans in the Middle East has risen to above 97,000 from about 55,000 in 2019m, according to the Labour Ministry.
Globally, the number of Kenyan migrant workers is over four million, with a greater percentage being skilled youth.