Kenyans Overseas Send Sh325.4 Billion in First Half of 2025

Remittances from Kenyans abroad reached Sh325.4 billion ($2.519 billion) in the first half of 2025, a 5.8 percent increase year-on-year, driven by concerns over imminent changes in US taxation policies. 

This spike comes as Kenyan migrants in the United States, the primary source of these inflows, anticipate a new 3.5 percent excise tax on cross-border personal transfers. The legislation, signed this month and set to take effect in January 2026, specifically targets non-commercial transactions vital for familial support.

The US accounts for 57 percent of Kenya’s remittance receipts as of May 2025. In 2024, Kenyans in the US remitted $2.63 billion, highlighting the potential economic impact of the tax, which analysts warn could cost Kenyan families billions annually.

The tax aligns with President Donald Trump’s domestic agenda, featuring stricter immigration controls and increased deportation threats, amplifying unease among Kenyan migrants who often support multiple dependents. This situation places added pressure on Kenya’s broader economic strategy.

Since 2015, remittances have been Kenya’s largest source of foreign exchange, exceeding tourism, agriculture, and foreign investment. These funds are crucial for education, medical care, housing, and daily living expenses. Any decline in remittances could significantly affect sectors dependent on this stable household income.

Kenya's government has been actively expanding overseas labour initiatives to combat domestic unemployment. However, the new US tax regime could undermine the viability of these programmes, given the US's position as a key destination for Kenyan workers.

The tax also challenges previous international efforts to enhance the affordability and accessibility of remittances for low-income countries. As the January deadline approaches, Kenyan families are preparing for reduced remittance margins.