Cash sent home by Kenyans living abroad almost doubled during the first quarter of the year compared to the same period last year.
In the January-March period, diaspora remittances grew Sh20.99 billion to record Sh64.44 billion collected.
The growth has been driven by a better global economic outlook and the tax amnesty on remittance imposed by the Kenya Revenue Authority last year, Stanbic Bank regional economist Jibran Qureishi told the Star yesterday.
The 48.31 per cent growth in foreign cash inflows is significantly large considering data by the Central Bank for the review period shows remittances grew by an average 8.86 per cent annually since 2013.
Given CBK data is solely based on remittances collected through formal channels, the World Bank believes the actual amount of these foreign cash inflows could be larger when you put into account transfers through unrecorded channels.
This include money brought home on return and transfers through unregistered intermediaries.
diaspora can fund sgr
Diaspora inflows which have stood as Kenya’s leading foreign exchange earner over four years can potentially decrease government borrowing, significantly easing the country’s debt burden.
In 2017, money sent home by Kenyans living abroad stood at $1.95 billion (Sh197.12 billion), a 13.09 per cent growth over Sh174.30 billion the previous year.
This means Kenyans living abroad could comfortably fund the second phase of the 120km Nairobi-Naivasha standard gauge railway line, which will cost taxpayers Sh150 billion in under a year.
In 2011, then CBK Governor Njuguna Ndung’u told Reuters the government was planning to raise nearly $600 million from Kenyans living abroad through a diaspora bond.
Though the plans did not see the light of day, year after year, the government has toyed with the idea that monies received from Kenyans living in the diaspora could be used to relieve the country’s sizeable public debt burden.
The bond issued by the country to its own diaspora to tap into their wealth for economic development would be highly dependent on the confidence Kenyan’s living abroad have in the government.
“There needs to be a tool that can benefit the public rather than the inflows just being sent back to relatives,” Kenya Diaspora Alliance chairman Shem Ochuodho said.