Kenya Targets Sh1 Trillion from the Diaspora

The Kenyan government is preparing to introduce a range of incentives to encourage Kenyans living abroad to send money back home.

Their target is to achieve at least Sh1 trillion in annual remittances by 2027. To get things started, the State Department for Diaspora Affairs (SDDA) is looking for a consultant to conduct a survey that will provide a foundation for developing a strategic plan to boost remittances. Over the past five years, Kenyans living abroad have been sending an average of $3.56 billion annually, with a modest four per cent growth last year to reach $4.19 billion. To reach the ambitious target of Sh1 trillion annually by 2027, remittances will need to grow by approximately 36 per cent over the next four years.

Despite the significant growth observed in recent years, there are concerns about a slight slowdown in remittance growth, especially from Kenyans residing in the United States, who account for nearly 60 per cent of the total amount. Factors such as increasing living costs and inflation in the US have had a dampening effect on remittance flows to Kenya. However, Central Bank of Kenya (CBK) Governor Kamau Thugge remains positive about the resilience of remittances from the US, pointing to a strong economy and job market.

Kenya has seen a rise in remittance contributions, with Saudi Arabia now surpassing the UK as the second-largest source of remittances. In response, the Kenyan government plans to create a supportive environment and system to encourage more remittances. They will implement specific strategies and incentives to boost inflows and strengthen the country's foreign exchange reserves, ultimately promoting sustainable economic growth.