•The US remains the largest source of remittances into Kenya, accounting for 57 per cent in the period, CBK data shows.
• Kenyans living abroad sent home Sh39.96 billion in May, a Sh1.49 billion drop compared to the Sh41.35 billion sent in April.
Image: FREDRICK OMONDI
Digital payments service World Remit has ranked Kenya among top remittance recipient this year.
The East African economic powerhouse emerged position two after Nigeria receiving £170 million (Sh24.4 billion) from its citizens abroad in the first half of the year.
Nigeria received £270 million (Sh38.8 billion ) via World Remit as of June 1.
Other top receivers were Zimbabwe,Ghana, Uganda, Tanzania, South Africa and Somaliland.
Even so, overall remittances in the month of May dropped, latest Central Bank of Kenya (CBK) data shows.
Kenyans living abroad sent home Sh39.96 billion in May, a Sh1.49 billion drop compared to the Sh41.35 billion sent in April. It is also lower compared to Sh42.05 billion sent in March.
Even so, May inflows are a 7.6 per cent increase from Sh37.1 billion received the same period last year.
The cumulative inflows for the 12 months to May 2022 totalled $3,992 million compared to $3,365 million in the same period in 2021, an increase of 18.6 percent.
The US remains the largest source of remittances into Kenya, accounting for 57 per cent in the period, CBK data shows.
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.
Diaspora remittances are now Kenya's forex earner after overtaking tea, coffee, and tourism in 2017.
Remittances not only represent an important source of forex but also support many livelihoods.
According to an analysis by global payments company, WorldRemit, education, healthcare, and household needs are the main uses of remittances in Kenya, sectors that tend to have a multiplier effect on development.
According to the global payments firm, the emergence of digital payments and concepts such as mobile wallets has brought more people into the financial system and greatly contributed to the steady increase in remittances inflows over the past decade.
Firms that have championed a digital-first model have benefited from this trend.
“We continue to grow in Kenya and across the region in part thanks to our digital payout channels. Although users can still pick cash at selected locations, more of them are opting for mobile and bank payout option,” it said in a statement.
Medical expenses and school fees took up to 50 per cent of $3 billion (Sh300 billion) sent to the country in 2020.
This is, however, an improvement compared to five years ago when up to 75 per cent of diaspora remittances was used to settle household needs.
EXCHANGE RATES
"The strong remittances inflows continue to support the current account and the stability of the exchange rate," CBK said in its weekly bulletin.
According to the central bank, the Kenya Shilling remained stable against major international and regional currencies during the weekending June 9.
It exchanged at Sh117.29 per US dollar on June 16, compared to Sh117.01 per US dollar on June 9.
The International Fund for Agricultural Development (IFAD) has projected global remittance to low and middle-income countries to reach $5.4 trillion (Sh633.7 trillion) by 2030.
The projected figure is equivalent to twice the GDP of Africa in 2021.
According to growth will be spurred on by digitalization particularly through mobile channels.