REMITTANCES

Kenyans sent home Sh37billion in October

The United States remains the largest source of remittances into Kenya

In Summary
  • Kenyans living and working abroad sent home $337.4 million (Sh37.8 billion) in October, an 8.9 per cent increase.
  • In a similar month last year, total remittances were $263.1 million (Sh29.4 billion).
The US Dollar notes/FILE
The US Dollar notes/FILE

Diaspora remittances to Kenya improved marginally last month, with the US dominating as the leading source of inflows.

Kenyans living and working abroad sent home $337.4 million (Sh37.8 billion) in October, an 8.9 per cent increase from $309.8million (Sh34.7billion) in September.

In a similar month last year, total remittances were $263.1 million (Sh29.4 billion).

This represents a 28.2 per cent increase , meaning Kenyans abroad sent more money this year despite the impact of Covid-19 continuing to be felt across economies.

The cumulative inflows for the 12 months to September 2021 totaled $3.605 billion (Sh403.9billion), a 19.9 per cent increase compared to $3.006 billion (Sh336.8billion) in the same period last year.

According to the latest weekly bulletin by the CBK, the United States remains the largest source of remittances into Kenya, accounting for 65.9 percent in October 2021.

Other significant source markets include the UK, Germany, and Canada.

Gulf states such as Saudi Arabia, United Arab Emirates, Qatar, and Bahrain have also emerged as important drivers of remittances, in line with the growing number of Kenyans immigrating to these countries in search of jobs.

Tanzania, Uganda, and South Africa lead as the top African source markets for remittance inflows into Kenya.

The improved remittance sentiment saw the forex reserves last week rebound slightly.

According to the CBK, the usable foreign exchange reserves stood at $9.094billion(Sh1.018trillion) as at November 11 compared to $9.068billion(Sh1.016trillion) as at November 4.

Remittances not only represent an important source of forex but also support many livelihoods.

Education, healthcare, and household needs are the main uses of remittances in Kenya, according to global payments company, WorldRemit.

Education is likely to remain a key use of remittances, and this will only increase with the packed school calendar post-covid,” said Sharon Kinyanjui, Director Europe, Middle East, and Africa Receive Markets at WorldRemit.

The global payments company had projected the remittances to increase as we approach the December festive season.

“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,” the firm notes.

Firms that have championed a digital-first model have benefited from this trend.

There are an estimated four million Kenyans living and working abroad, according to the Ministry of Labor and Social Protection, with remittances currently being among highest foreign exchange earners apart from tea, coffee and tourism.