•The government has so far taken the right step by establishing the State Department for Diaspora Affairs.
Image: COURTESY
Recently, the African Development Bank (AfDB) president Akinwumi Adesina tweeted that Africans in diaspora are the continent's largest financiers.
Remittances from the diaspora to Africa have steadily grown from $37 billion in 2010 almost three-fold to $96 billion in 2021.
In comparison, he noted that the total official development assistance to Africa in 2021 stood at $35 billion, or just about 36% of remittances from diaspora.
Closer home, the Central Bank conducted Kenya’s first Diaspora Remittances Survey.
Data from the survey showed inflows to Kenya have increased tenfold in the last 15 years reaching an all-time record of $3.7 billion in 2021.
This phenomenal growth points to the importance of remittances as a source of foreign exchange to the country, equivalent to more than three per cent of Kenya’s GDP.
While Kenyans are now sending much more money back home in value and usefulness, we need to interrogate why they send this money.
A significant portion of remittances is targeted to meet specific household needs of the recipients – usually recurrent expenditures like school fees, rent and medicare.
In fact, the Fund for Agricultural Development (IFAD) 2021 global data on remittances shows diaspora remittances can make up as much as 60% of a household’s total income for millions of families.
However, with the right policies, Kenya is ripe to attract more diaspora involvement in order to grow the economy in the longer term with a clear diaspora engagement blueprint.
The government has so far taken the right step by establishing the State Department for Diaspora Affairs.
Key to this will be the closing of the disconnect between Kenyan systems and the diaspora, who mostly rely on family and friends to get information on the happenings at home.
Players at home including the government and the private sector need to invest in a strong communications strategy that proactively targets Kenyans in the diaspora, with a consistent breakdown of the developments at home and the benefits of their involvement with tangible results.
Once the blueprint and the communications strategy are in place, the next step is to develop networks that will be strategic to build and deepen partnerships at every possible level both at home and abroad.
The government can support this by providing routine forums for knowledge and information sharing that will give Kenyans in the diaspora an opportunity to invest in start-ups, SMEs, investment funds and even government bonds and areas of high potential.
Kenyan tech start-ups for example this year alone had attracted Sh62 billion between January to November.
Relaxing legal barriers and remittance costs will also be critical to the growth of Kenya’s economy.
On average, Sub-Saharan Africa including Kenya is the most expensive region in the world to send remittances to.
It costs 8.9% of the transfer value to send into the region as at 2020, compared to the global average of 6.8% according to the World Bank in 2020.
While this has reduced from 10.14% in 2014, we can still do better if we’re to attract more remittances from Kenyans abroad.
Kenya has the gift of a highly industrious and enterprising population both at home and abroad.
As the country continues to position itself for growth at both public and private levels, instituting policies that support the economy including tapping into opportunities presented by the diaspora should be a key focus for 2023.
The writer is the managing director of strategic communications and critical issues management firm Calla PR.