Diaspora (Commonwealth Union) _Over the last seven months, Kenya has experienced a remarkable 42% increase in remittances from its diaspora in other African countries. This surge in remittances has reached at least $164.4 million (Ksh22.2 billion), marking a significant rise from $116 million (Ksh15.6 billion) during the same period last year. This growth has outpaced all other continents and coincided with high inflation rates in North America and Europe, where the US saw an average inflation rate of 8% and the UK 7.9%.
The pursuit of better job and educational opportunities abroad has been a major driving force behind Kenyans seeking employment in other countries, especially within Africa. Countries such as Uganda and Zambia have emerged as destinations that offer more favorable prospects for Kenyan citizens.
Inflows from Zambia have more than doubled, experiencing a 136% growth to $5 million, while Uganda saw a robust 113.5% growth in remittances sent back home by Kenyans.
Remittances play a pivotal role in Kenya’s economy, constituting the largest single source of foreign exchange inflow, surpassing earnings from sectors like tourism, tea, and horticulture. In 2021, remittances reached $4.3 billion (Ksh483 billion), making them a vital economic lifeline.
However, global inflation, driven by geopolitical tensions, has caused the US to raise its interest rates, resulting in tighter global monetary policies. This has led to a preference for investment in government securities and a decrease in inflows into countries like Kenya.
While Kenya’s remittance growth from other African countries is notable, some destinations have seen a decline. For instance, remittances from Qatar fell by 38.4% to $31.9 million, while inflows from Oman dropped by 68% to $1.1 million. South Africa also experienced a substantial decrease, with remittances halving to $6.3 million from $13.5 million during the January-July period in the previous year.
