Kenyans abroad sent home more money in March – CBK

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.

Last month’s inflows hit a record monthly high of $363.6 million (Sh42.2 billion), Central Bank of Kenya (CBK) data shows.

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.

The shilling hit a low of 115.59 against the greenback on Friday – CBK.

In January, Kenyans living and working abroad sent home $338.7 million (Sh39.2 billion).

This year’s March inflows are 25.2 per cent higher compared to $290.8 million (Sh33.7 billion) sent home in the same month last year.

The cumulative inflows for the 12 months to March 2022 totaled $3.91 billion (Sh453.6 billion) compared to $3.22 billion (Sh373.6 billion) same period in 2021, an increase of 21.6 percent.

“The US remains the largest source of remittances into Kenya, accounting for 58 percent in March 2022,” CBK notes in its weekly bulletin.

The other top source countries are UK (11.2 per cent), Saudi Arabia (4.0 per cent), Canada (2.9 per cent), and Australia (2.9 per cent).

Gulf states such as Saudi Arabia, United Arab Emirates, Qatar, and Bahrain have continued to remain 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.

Diaspora remittances are now Kenya's forex earner after overtaking tea, coffee, and tourism in 2017. 

Tea and coffee earnings have been shrinking in recent times due to high global supply, eroding prices.

Education, healthcare, and household needs are the main uses of remittances in Kenya, an analysis by WorldRemit indicates, with the country being among the top receivers in the continent.

Kenya is ranked third among the biggest recipients in Sub-Saharan Africa, after Nigeria and Ghana.

Approximately three million Kenyans are living abroad according to the Ministry of Foreign Affairs.

Despite Covid-19, officially recorded remittance flows to low- and middle-income countries reached Sh58.2 trillion in 2020, just 1.6 per cent below the 2019 total of Sh59.1 trillion.

“As Covid-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

Excluding Nigeria, remittance flows to Sub-Saharan African increased by 2.3 per cent with growth reported in Zambia (37 per cent), Mozambique (16 per cent), Kenya (9 per cent) and Ghana (5 per cent).

The inflows play a critical role in the country's forex reserves, cushioning the Kenyan economy, besides supporting millions of families.

Meanwhile, the International Organisation for Migration–UK has called on governments, the financial sector, and money transfer operators to commit to a cross-sector approach to facilitate cheaper, transparent, and more accessible remittances worldwide that leverage their full potential development.