Kenyans living and working abroad sent home an additional Sh2.3 billion in October, up from the $340.4 million (Sh51.89 billion) the previous month.
Latest Central Bank of Kenya (CBK) data shows remittance inflows in October totalled $355.6 million (Sh54.2 billion) compared to $332.6 million in October 2022, a 6.9 per cent increase.
“The cumulative inflows for the 12 months to October 2023 hit $4,165 million (Sh634.9 billion) compared to $3,996 million (Sh609.1 billion) in the same period in 2022, an increase of 4.2 per cent,” CBK says in its weekly bulletin.
The additional remittances could be on the back of the easing inflationary pressures across key markets including the US.
It could also be because migrant workers are riding on the weakening shilling against the dollar to send more money home, as projected by Western Union’s inaugural Global Money Transfer Index which predicted an increase in remittances, fuelled by the weakening shilling.
September’s inflow dropped from a high of $378.1 million (Sh57.6 billion) sent in July and $354.3 million (Sh54 billion) in August, to $340.4 million (Sh51.89 billion).
July 2023 recorded the highest ever amount to be sent back home by Kenyans.
The additional amount however, did little to support the country’s forex reserves, which continued to weaken further.
Forex reserves dipped to a low of $6,785 million (Sh1.03 trillion), an equivalent of 3.6 months of import cover, from $6,833 million (Sh1.04 trillion) just about 3.67 months of import cover a month earlier.
This is below the statutory requirement to have at least four months of import cover at any given point.
The US remains the largest source of remittances into Kenya, accounting for 54 per cent in October 2023.
In recent times, Saudi Arabia has emerged as the primary contributor to the rapid increase in remittances flowing into Kenya.
This development has prompted Nairobi to initiate discussions for a bilateral agreement with Riyadh.
The agreement aims to establish a structured framework for recruiting professionals to work in Saudi Arabia.
In 2022, Kenyan expatriates living and working in Saudi Arabia sent home a total of $302.26 million (equivalent to Sh46 billion).
This marked a substantial increase from the $185.01 million (Sh28.2 billion) remitted in 2021, despite the challenges posed by elevated global inflation affecting remittances from other key sources.
Kenya's primary source of foreign exchange profits in 2017 was diaspora remittances, which surpassed earnings from tea, coffee and tourism.
The Covid-19 pandemic dealt a serious blow to the tourism sector, which was previously the second-largest provider to foreign exchange earnings. In 2020, sector revenues fell by 80 per cent.
This was compared to 2019, when the country generated Sh162 billion.
