By Elijah Odhiambo
Kenya is now earning more foreign exchange from diaspora remittances than each of its major exports – coffee, tea and horticulture.
The latest figures from the Central Bank of Kenya reveal that the amount of money Kenyans abroad sent home in the month of March rose by 15.5 percent to US$357 million (Ksh47.2 billion) on the backdrop of a strengthening dollar against the Shilling.
In February, the country received US$309.2 million (Ksh40.9 billion), lowest in seven months since July last year.
“Cumulatively, for the 12 months to March this year, the inflows increased to US$4,020 million (Ksh532.3 billion), compared to US$3,912 million (Ksh518 billion) in a similar period in 2022,” CBK notes in its weekly bulletin.
The tourism sector which used to be the second most forex earner was the worst hit by Covid-19, with sector revenues declining by 80 percent in 2020 compared to 2019 when the country realized Ksh162 billion.
Data from the Ministry of Tourism shows the tourism sector directly contributes 4.4 percent of the Gross Domestic Product (GDP).
However, the sector is showing a great recovery with international arrivals hitting pre-covid levels.
Experts are linking it to a systematic ease in inflation in developed nations that has been squeezing disposable income.
Inflows for 12 months to March
Inflows totaled US$4,020 million in the 12 months leading up to March 2023, compared to US$3,912 million during the same time period in 2022.
Along with being a significant source of foreign exchange, remittances also help many people maintain their way of life.
According to a WorldRemit research, the three major purposes for remittances in Kenya are household needs, healthcare, and education, all of which have an ability to accelerate growth.
Kenya is one of the top three African nations in terms of remittance receipts, according to the firm; Nigeria and Zimbabwe were the top two countries.
According to WorldRemit, which has partnered with local banks to enable direct transmission of money to accounts, and M-pesa, digitization is still a major factor in the expansion of remittance services.
Building welfare of Kenyans in diaspora
President William Ruto’s administration says it is paying more attention to the diaspora and has since established a state department to respond to specific issues of Kenyans abroad.
Both the Principal Secretary, Roselyn Njogu, and Cabinet Secretary for Foreign and Diaspora affairs, Alfred Mutua, have been making serious efforts, with the welfare of the Kenyan diaspora top of their priorities.
In the three months they have been in office, they have both visited Saudi Arabia, one of the biggest destinations for Kenyans seeking domestic work abroad.
“We want to take care of Kenyans; provide opportunities for them to get international jobs; to leverage them into positions and powers overseas so that they can help those at home; and we want to open up trade opportunities for those who are overseas,” Mutua said during an interview on Citizen TV.
The US remains the largest source of remittances into Kenya, accounting for 58 percent.
According to a recent study by international money transfer service Western Union, 67 percent of Africans abroad send more money when the value of the local currency declines, and 65 percent of recipients concur that when currency values fall, they get more money.
More over seven in ten Africans who get remittances, or 78- percent, say they anticipate an increase this year, indicating that the majority of Africans who work abroad are enthusiastic about the trend.
The shilling’s decline to a new low of 133.95 against the dollar from 132.94 units the previous week was not helped much by the surge in diaspora remittances.
