Remittances from abroad hit Sh45bn in five months

Kenyans living abroad sent Sh45.05 billion into the economy during the first five months of 2013.

Data from the Central Bank of Kenya (CBK) indicates that diaspora remittances grew 5.5 per cent to Sh45.05 billion from the Sh42.7 billion recorded over a same period in 2012.

In May alone, remittances totalled Sh11 billion. 52 per cent of this money originated from the United States and Canada while Europe accounted for 26 per cent of remittances in May.

“North America’s dominant position is a reflection of the large number of Kenyans with gainful economic activities in the region,” noted the Central Bank.

It is estimated that three million Kenyans live in the diaspora. Although there are no exact figures, the government estimates that many of these Kenyans have settled in the United States.

Over the last decade, diaspora remittances have proven increasingly important to the Kenyan economy, competing directly with such top foreign exchange earners as coffee and tea.

The Central Bank notes that over the last two years, Kenyans living abroad have been taking advantage of government investment vehicles.

Growth in remittances in April and May is a reflection of the fact that the country is shaking off election jitters. In the first three months of the year, diaspora remittances remained relatively flat.

Although remittances have remained largely immune to economic headwinds in the United States and in Europe, analysts have estimated that as the American economy continues on the recovery path, remittances will grow.

The United States has reported has grown its GDP for the last 15 consecutive quarters. However, this growth has remained subdued the around the two per cent mark.