Kenyans in North America top in record diaspora remittances of Sh55.13 billion in August
By Lucy Mumbi |
According to CBK, on average, daily remittances reached Sh1.78 billion, bringing the total for the first eight months of the year to $2.81 billion (Sh362.4 billion), compared to $2.77 billion (Sh356.9 billion) in the same period last year.
Data from the Central Bank of Kenya (CBK) shows Kenyans living and working abroad sent home $427.2 million (Sh55.13 billion) in August, setting a new monthly record.
The figure represents an increase from $414.3 million (Sh53.46 billion) in July, with much of the growth attributed to Kenyans in North America.
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According to CBK, on average, daily remittances reached Sh1.78 billion, bringing the total for the first eight months of the year to $2.81 billion (Sh362.4 billion), compared to $2.77 billion (Sh356.9 billion) in the same period last year.
This is the highest ever recorded inflows in the past four years boosted by the cut in fed rate that has seen economies open up.
“The remittance inflows continue to support the current account and the foreign exchange market,” CBK said in its weekly dispatch.
Remittances from North America, which includes countries such as the United States, Canada and Mexico, increased by 9.9 per cent to $250.1 million (Sh32.27 billion), making up 58.5 per cent of total remittances.
The U.S. is home to the largest Kenyan migrant population, estimated at 157,000, followed by the United Kingdom with 139,000.
While North American remittances rose, those from Europe decreased by 7.1 per cent to $68.45 million (Sh8.83 billion) and remittances from other regions fell by 3.8 per cent to $108.67 million (Sh14 billion).
CBK adjustment
In June, the CBK adjusted its annual growth forecast for diaspora remittances to 12 per cent from five per cent, following a strong 20 per cent growth in the first four months of the year.
Since 2015, diaspora remittances have emerged as Kenya's largest source of foreign cash flows, surpassing tourism and foreign direct investments.
In February, the government announced plans to implement incentives aimed at boosting remittances to at least Sh1 trillion annually by 2027, up from Sh671 billion sent last year, to strengthen the country’s foreign exchange reserves.
The inflows play a crucial role in bolstering the country’s foreign exchange reserves, which stood at a healthy $7.856 billion (Sh1.01 trillion) as of September 20, 2024, providing coverage for 4.1 months of imports.
“This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover,” CBK noted.
The State Department for Diaspora Affairs is currently seeking a consultant to conduct a baseline survey to inform the development of a strategic plan for enhancing remittances.
Over the past five years, average remittances from Kenyans abroad have totalled $3.56 billion (Sh459.38 billion), with last year seeing a growth of four per cent to reach $4.19 billion (Sh540.67 billion), as reported by CBK data.
According to an analysis by WorldRemit, education, healthcare and household needs are the main uses of remittances in Kenya, 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.
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