Kenyans living and working abroad have sent home a staggering $2 billion (Sh258.9 billion) in the first five months of 2024, marking an 18.9% increase from the same period last year. The Central Bank of Kenya (CBK) attributes this surge to easing inflationary pressures in developed economies, underscoring the vital role of diaspora remittances in the country’s economy.
According to CBK data, remittance inflows remained robust, reaching $404.4 million in May alone, with the US accounting for 48% of total remittances. The strong performance is part of a projected 12% year-on-year growth in remittances for 2024, which would see the total annual flow exceed $4.6 billion.
This surge in remittances comes as a boon for Kenya, especially amidst global economic uncertainties. The CBK’s projection of the fastest annual growth since 2021 indicates a strengthening link between Kenyans abroad and their families back home.
The impact of these remittances extends beyond financial support, as they also contribute to the stability of the local currency. The Kenyan shilling has strengthened against the dollar, reaching a 15-month high, partly due to amplified dollar inflows from abroad.
Aside from the US, other significant sources of remittances include Germany, Australia, the United Arab Emirates, Tanzania, and Canada. This diversification of remittance sources underscores the resilience of Kenya’s diaspora network.
Since 2015, remittances have consistently been the largest source of foreign cash flows into Kenya, surpassing tourism, foreign direct investments, and exports. A CBK survey highlighted the crucial role remittances play in supporting families’ basic needs, including food, healthcare, and education.
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