- One in 9 people worldwide relies on money sent from friends and relatives who have migrated abroad for work
- Diaspora remittances continue to be Kenya’s leading forex earner for the fourth year after outpacing tea, coffee and tourism.
More than half (54 per cent) of remittance senders have taken up a side hustle since the global Covid-19 pandemic; almost one-fifth did so to continue to be able to support friends and family abroad
The latest survey by digital remittances company WorldRemit is coming at a time the global inflation is rising amid fears of a recession, forcing families to search for secondary sources of income to supplement existing channels.
Most households globally are witnessing the highest cost of living in 40 years.
Dubbed the Cost of Living Index, the survey sought to understand how the worsening inflation crisis has affected the lives of international money senders around the world.
The survey found that 82 per cent of remittance senders, including Kenyan migrants who are key remittance senders in the US, Australia, and UK markets, agreed that the cost of living for the people to who they send money to has risen since the start of the year.
Highlighting the impact of inflation on people around the world, almost half (45%) noted they now only send money to immediate family, rather than friends and distant relatives.
One in 9 people worldwide relies on money sent from friends and relatives who have migrated abroad for work. With several factors contributing to increased financial pressure, new data showed that 72 per cent of respondents in the US, 41 per cent in Australia, and 44 per cent in the UK have taken up a side hustle
At least 27 per cent of respondents on average across our three markets indicated they did so to support the increase in their own cost of living.
Of the respondents who cited having a side hustle, 89 per cent reported that they would maintain their side hustle in the next 12 months.
Households around the world are set to re-examine their spending habits in light of inflation, with more than a quarter of respondents (26 percent) saying that they are curtailing discretionary spending on entertainment such as dining out or going to the cinema or theatre.
For example, in the UK (65 per cent) of people noted concerns regarding the cost of utility bills, highlighting the change in spending habits of UK households as a result of the energy crisis.
“The inventive solutions, such as side hustles, that we are seeing as a result of the current economic landscape point to the resilience of migrants and their commitment to financially supporting loved ones overseas,” said Ivan Kanyali, regional manager of East Africa, WorldRemit.
According to Kanyali these findings demonstrate the grit of economic migrants in adapting to wider financial stresses and the rising cost of living while still meeting the needs of their families at home,
The WorldRemit multi-country study was fielded in October 2022 to determine the ongoing effects of the increased cost of living on international money senders in the United States, United Kingdom and Australia, resulting in observations from 2,687 international remittance senders.
Whilst there were minor differences, broadly speaking, 1st generation migrants’ views were aligned with those of the overall sample in our survey.
Despite the high cost of living globally that shrunk disposable income, Kenya received a sizable amount by end of November last year.
This saw Kenya ranked among Africa’s top three recipients of diaspora remittances behind Nigeria and Ghana, according to a World Bank report.
According to the report, Kenya received $4.1 billion (Sh503 billion) by end of November, compared to $20.9 billion (Sh2.6 trillion) for Nigeria and Ghana $4.7 billion (Sh577 billion).
Senegal and Zimbabwe collected $2.7 billion and $2 billion, respectively (Sh245.4 billion), closing among the top five nations in the region.
Diaspora remittances continue to be Kenya’s leading forex earner for the fourth year after outpacing tea, coffee and tourism.
World Bank says digital technologies allow for significantly faster and cheaper remittance services.
Even so, according to the bank’s latest Migration and Development Brief, Africa recorded the slowest growth in diaspora remittances compared to other continents in 2022.