Diaspora cash to Kenya records 32pc increase to hit Sh90bn

Money sent back home by Kenyans living abroad rose 32 per cent in the 11 months to November last year, compared with a similar period in 2011.

The Central Bank of Kenya (CBK) recorded Sh90.54 billion ($1.06 billion) in diaspora remittances for the first 11 months of 2012, up from Sh68.5 billion ($805 million) in 2011.

Diaspora remittances have become increasingly important to the Kenyan economy, rivalling tea and tourism as key revenue earners.

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According to the World Bank, remittances sent from the diaspora to sub-Saharan Africa in 2012 will eclipse total official development assistance.

“Due to the huge sums involved, remittances are now being recognised as an important contributor to the country’s growth and development,” the Central Bank said in a statement on its website.

Remittances sent in November showed a resurgence after a slowdown in September and October.

Remittances had hit a nine-month low in October at Sh7.78 billion ($91.62 million), attributable to a reduction of inflows from Europe.

As the holiday season drew closer, the situation rectified itself, with remittances jumping six per cent to hit Sh8.28 billion ($97,504 million) in November.

The trend in inflows to Kenya seems to defy World Bank predictions of flat growth to sub-Saharan Africa in 2012 as Europe continues to battle an economic crisis.

In its November 2012 migration report, the World Bank predicted zero per cent growth in remittances to sub-Saharan African countries with large diaspora communities in Western Europe.

But Kenyan diaspora remittances have so far proven resilient, exhibiting robust growth in the face of global financial crises. 

Remittances for the 11 months to November have already surpassed the Sh75.74 billion ($891 million) reported for the full year 2011.

The Central Bank attributes this to increasing money transfer channels that are fostering competition in the sector, as well as initiatives by the government to introduce new investment vehicles targeted at the diaspora.

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