INFLOWS

Kenyans abroad sent home a record Sh279 billion last year

The remittances in Kenya have risen to become the biggest source of foreign exchange, ahead of tourism, tea, coffee and horticulture exports.

In Summary

• Even so, the amount falls short of the World Bank’s prediction of Sh285.5 billion, which could have been a five per cent growth.

• North America, Europe and the Rest of the World accounted for 50%, 20%, and 30%, respectively, of the total remittances in December.

Central bank of Kenya./FILE
Central bank of Kenya./FILE

Kenyan living abroad sent home Sh6.3 billion more last year compared to 2018, signaling a 3.7 per cent growth, the slowest rate since 2015.

A weekly bulletin by Central Bank of Kenya shows a total of Sh279.6 billion was sent as of December 31 compared to Sh269.7 billion sent the previous year, with those in US accounting for half of the total cash sent.

North America, Europe and the Rest of the World accounted for 50 percent, 20 percent, and 30 percent, respectively, of the total remittances in December.

 
 

They also sent home a better package for Christmas festivities, with December remittance rising to Sh25 billion compared to the Sh21.8 billion similar period in 2018.

Even so, the amount falls short of the World Bank’s prediction of Sh285.5 billion, which could have been a five per cent growth.

‘’The rate of growth of remittance inflows will rise by just 5 percent compared to a 39 percent growth between 2017 and 2018,’’ World Bank said in December.

The global lender had however anticipated the lowest growth in Kenya’s diaspora remittance for the year ended December 31 on mounting economic concerns in the United States and the United Kingdom where a recession is on the horizon despite strong employment data.

''With the world slipping into a recession it is feared that remittance inflows may suffer as companies layoff staff in the developed world even as employers and employees adopt austerity measures,'' World Bank's report said.

The remittances in Kenya have risen to become the biggest source of foreign exchange, ahead of tourism, tea, coffee and horticulture exports.

The latest data from the Kenya National  Bureau of Statistics show there were at least three millions Kenyans living abroad last year. 

Although Kenya is the fourth-largest recipient of remittances in Africa after Egypt, Nigeria, and Ghana, it least depends on the revenue, which accounts for only three per cent of the Gross Domestic Product compared to Nigeria six per cent, Egypt seven per cent and Ghana eight per cent.

The slow growth in remittance is expected to worsen as experts anticipate a return of the Great Depression driven by inequality and financial sector instability.

 
 

On Saturday, the head of the International Monetary Fund (IMF) Kristalina Georgieva warned of a likely financial crisis, which will be worsened by current trade problems and climate-driven weather events.

"It's imperative that we ensure the financial sector is free of risky behavior and corruption if we want to protect ourselves from another global financial crisis. Our research compares the current economy to the "roaring 1920s" economy that culminated in the great market crash of 1929,’’ Georgieva said.