Kenyans abroad sent home Sh22.82 billion more last year compared to 2016, consolidating remittances’ position as top source of foreign exchange ahead of tea exports and tourist receipts.
Fresh data from Central Bank of Kenya (CBK) shows diaspora remittances hit an all-time high of Sh197.12 billion ($1.95 billion) in the 12 months through December, a 13.09 per cent growth over Sh174.30 billion the previous year.
Inflows in December rebounded from a marginal slowdown in November to touch a new monthly record of Sh20.64 billion ($203.82 million).
The remittances once again beat tea exports whose earnings grew a modest 7.5 per cent to Sh129 billion and tourist receipts that jumped by a fifth to Sh120 billion.
Cash from Kenyans in North America, largely the US and Canada, grew by 18.63 per cent to Sh101.60 billion ($1 billion), while those in Europe sent in 22.71 per cent more to Sh63.40 billion ($629.11 million) compared with 2016.
Remittances from the rest of the world, however, fell 14.05 per cent to Sh31.82 billion ($314.29 million).
Inflows from North America made up 51.54 per cent of the total followed by Europe which controlled 32.31 per cent share, while the rest of the world had a 16.14 per cent. The data captures cash sent in through formal channels such as commercial banks and bureaus.
When remittances through informal channels are factored, chief executive of investment advisory Rich Management Group, Aly-Shan Satchu, has maintained the value could be double what’s captured by the CBK and rising.
“I was concerned that a Make America Great Again Trump was going to weigh on this curve, but so far we appear to have escaped that dragnet,” he said in a past interview.
An estimated three-quarters of Kenya’s diaspora remittances go to family support obligations such as school fees and medical bills.
Kenya Diaspora Alliance (KDA) chairman Shem Ochuodho has argued that could be reversed in favour of investments if citizens abroad were offered incentives such as tax rebates to invest back home.
The inflows, CBK governor Patrick Njoroge said last September, had stabilised the shilling last year, which shed a marginal 0.66 per cent against the US dollar.
“This year we could see even better flows because generally global markets are doing better. GDP in the Eurozone and the US is growing and we are also now in an investment environment, and so it is a stability year and people will be bringing money back home,” chief investment officer at Cytonn Investments Elizabeth Nkukuu said.