Central Bank of Kenya (CBK) has revealed plans to develop a framework that will offer incentives to Kenyans in the diaspora who set up businesses back home.
CBK Governor Patrick Njoroge says they will rely on the findings of a study the bank carried out recently to draft a facilitative policy that encourages increased direct investment flows by Kenyans living and working abroad.
The survey conducted in February and March was the country’s first-ever survey on diaspora remittances and was aimed at collecting information on remittance inflows to help guide policy to boost the role of remittances in supporting the economy and livelihoods.
CBK said it expected to gather information on the efficiency and cost of alternative remittance channels, difficulties encountered in remitting cash or non-cash transfers, the availability of information to Kenyans in the diaspora about investment opportunities in Kenya, and the usage of remittances received.
The survey was done in partnership with the Ministry of Foreign Affairs and Kenya National Bureau of Statistics (KNBS).
“There are all sorts of ways that the Kenyans out there could be supportive (to economic development), not just making investments in government securities and other assets like equities,” said Njoroge.
“They can set up shops here; they can have direct investments … as has happened in other countries like India, not just portfolio investments.”
Despite the COVID-19 crisis, Kenyans in the diaspora sent home a record Sh341 billion in 2020, representing a 10.7 percent growth compared to 2019.
Diaspora remittances have remained Kenya’s leading source of foreign exchange since 2015, ahead of earnings from tourism, tea, coffee, and horticulture exports.