Diaspora forex inflows exceed CBK projection

Diaspora remittances for June for the first time in three years beat those of December, lifting cumulative inflows above Central Bank of Kenya (CBK) target.

Fresh figures released by the CBK show Kenyans living in the diaspora sent home $244 million (Sh24.79 billion) in December last year, a growth of 20 per cent sent on the previous similar month.

“North America, Europe and the rest of the world accounted for 45 percent, 32 percent and 23 percent, respectively, of the total remittances in December 2018,” said the regulator.

However, this was dwarfed by the $266.2 million (Sh27.08 billion) that was sent home in June according to data from CBK.

This is the first time since 2015 for December remittances to be lower than those of any other month.

June remittances represented a 72 per cent rise compared to a similar month last year with CBK linking this to lower costs of remitting money.

The rise helped lift the 12-month cumulative inflows to December to $2.697 billion (Sh274.3 billion) from 1.947 billion (Sh198 billion) in previous 12 months to December 2017, reflecting a 39 percent growth.

At Sh274.3 billion, the remittances exceeded CBK’s target. Governor Patrick Njoroge said in November the bank was targeting $253 million (Sh259.3 billion) remittances in 2018.

June was the deadline month for the tax amnesty period that had been declared by National Treasury to allow for remitting assets stashed abroad. The period was, however, extended.

Analyst have attributed better inflows to the amnesty even as CBK downplayed the effect.

The spike started in May as remittances hit Sh25.8 billion ($253.7 million), helping the second quarter of the year to beat the last quarter earnings by 58.8 per cent.

While three months to June generated Sh74.96 billion ($737 million), three months to December had Sh47.2 billion ($464 million).