REMITTANCES

Diaspora inflows rise to ShSh52.2bn in May

The US remained the largest source of remittances to Kenya, accounting for 48 per cent in May 2024

In Summary

•The US remained the largest source of remittances to Kenya, accounting for 48% cent in May 2024,” Central Bank of Kenya noted in its weekly bulletin released on Friday.

•Other top sources of remittances are Canada, the United Kingdom, Germany, Saudi Arabia, the United Arab Emirates and Australia.

A cashier at a Nairobi forex bureau counts dollars and shilling notes.
A cashier at a Nairobi forex bureau counts dollars and shilling notes.
Image: FILE

Kenyans living and working abroad sent home $404.4 million (Sh52.2 billion) in May, latest official data shows, as monthly inflows increased by Sh8.1 billion.

This is up from $320.3 million (Sh44.4 billion) sent in the month of April, when inflows had recorded a Sh5.1 billion drop from April remittances.

Last month’s inflows are also higher by about 14.9 per cent compared to the same period last year, when they closed at $352.1 million (Sh45.4 billion).

The cumulative inflows for the 12 months to May 2024 totaled USD4,509 million (Sh582.6 billion) compared to USD 3,997 million (Sh516.5 billion )in a similar period in 2023, an increase of 12.8 per cent.

“The US remained the largest source of remittances to Kenya, accounting for 48 per cent in May 2024,” Central Bank of Kenya noted in its weekly bulletin released on Friday.

Other top sources of remittances are Canada, the United Kingdom, Germany, Saudi Arabia, the United Arab Emirates and Australia.

Remittance inflows totaled Sh990.1 billion in 2023, an increase of 27.9 per cent from Sh774.3 billion in 2022, the Economic Survey 2024 by the Kenya National Bureau of Statistics (KNBS) indicates.

During the period (January-December), the US continued to lead as the top source for remittances to Kenya, as the country’s inflation started to ease compared to the previous year, as fed rate hikes started to pay-off.

The inflows have also continued to support the Kenyan shilling which hit a record low of Sh163 to the dollar in February, as the country experienced a dollar shortage at the back of high demand by importers during the period.

It has however gained and remained stable against major international and regional currencies during the week ending June 13. It exchanged at Sh128.46 per US dollar on June 13, compared to Sh130.72 per US dollar on June 6.

The inflows are also a key support for the country’s foreign exchange reserves which remained adequate at $7,012 million (Sh905.9 billion), ich is equivalent to 3.7 months of import cover as of June 13.

“This meets the CBK’s statutory requirement to endeavor to maintain at least four months of import cover,” CBK noted.

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

Kenyans have also in recent years increased investments in real estate and the capital market, with the US, Canada and the UK topping the list.

The US and Canadian diaspora community has been mobilising investment through Saccos.

The most recent is the Pamoja Canada Diaspora Sacco Society Limited unveiled in Toronto after three years of  intense preparations.

The event was attended by Kenyans living in Canada and graced by Kenya High Commission and other invited guests from across the Greater Toronto Area.

The Diaspora Sacco draws its identity from its vision, mission, core values and its overarching goal, according to leadership. It aims to promote thrift, welfare and mutual economic interests among its members through provision of savings, investments and loan opportunities.

It gives Kenyans in the diaspora and the returnees confidence as they now have something to resonate with in relation to their grand projects back at home, its leadership noted.

It allows members to mobilise their savings, thereby providing affordable loan facilities for the promotion of their social and economic well- being through cautious management and product diversification, while considering the interests of all stakeholders including the Muslim Community.

For their saving modes, members can opt to spread their portfolios in main, fixed deposit, young dreamers, emergency or holiday accounts. Other Sharia-compliant products are in the process of being launched in 2024.

“The prosperity of our Kenyan Diaspora in Canada and their strength as a community is a function of their savings and investment in Kenya and Canada. To bring its promise into fruition, Kenyans much invest and make the leadership accountable every step of the way. Together we can!” said Ambassador Moni Manyange.

Canada Diaspora Sacco Board chairman  Ephraim Mwaura said: “Sharia-compliant products that Pamoja Canada Diaspora Sacco will offer align with Islamic finance principles. The strategic effort underscores the Sacco’s unwavering dedication to ethical practices and its commitment to meeting the diverse needs of its members.”

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