Remittances from Kenyans in the Diaspora Drop for the First Time in 13 years

For the first time since 2010, diaspora remittances in the first three months to March declined as inflation hit multi-decade highs in many countries including the US and UK.

Kenyans living and working abroad sent home $1.016 billion (Sh137.4 billion) in the first quarter of the year compared to $1.024 billion (Sh138.5 billion) in the same period in 2022, according to Central Bank of Kenya (CBK) data.

“This signals that the cost of living in the source countries is putting pressure on remittances. Individuals, for instance, might be forced to put aside more income to meet rising expenses, reducing the pool of funds available to send back home as remittances,” Ronny Chokaa, a research analyst at Genghis Capital, told Business Daily.

Most Kenyans abroad send money to support their families as well as invest in real estate projects, with the US accounting for nearly 60 percent of the total remittances into Kenya.

Kenya earned more foreign exchange from diaspora remittances than each of its major exports (coffee, tea and horticulture) last year, CBK data shows. Inflows from the diaspora hit a record $4.027 billion in 2022.

CBK data show that remittances from countries like the US, India, and Qatar dropped in January and February. Remittances from Kenyans in the US dropped by $8.9 million (Sh1.2 billion) in the two months.

The Kenya Diaspora Remittances Survey Report, commissioned by the CBK, showed that the largest share of the remittances went into supporting families in buying food and household goods.

“The cash is also used in offsetting medical expenses, meeting education expenses, payment of rent and household utilities, payment for the costs associated with ceremonies, clothing needs of the recipient and to meet farming needs,” read the report.

Global payments company WorldRemit ranks Kenya among the top three countries in Africa in receiving remittances behind Nigeria and Zimbabwe.