Kenyans living abroad have made a significant contribution to the nation’s economy, increasing their remittances by $72.9 million (Sh9.4 billion) in August 2024 compared to the same period last year. This brings the total remittances for the month to $427.2 million (Sh55.09 billion), marking a 20.6 percent increase from August 2023. This surge represents the highest amount ever recorded for remittances to Kenya from its citizens abroad.
The cumulative remittance inflows for the 12 months leading up to August 2024 reached $4.645 billion (Sh593 billion), up from $4.120 billion (Sh529 billion) during the previous year. This 12.7 percent increase highlights the robust support that these funds provide to the Kenyan economy, particularly as global economic conditions improve due to favorable interest rate adjustments.
According to the Central Bank of Kenya (CBK), the remittance inflows not only bolster the current account but also play a crucial role in supporting the foreign exchange market. The United States remains the largest contributor, accounting for 56 percent of the total remittance inflows in August 2024, with other significant sources including the United Kingdom, Canada, and the Middle East.
Over the past four years, remittances have emerged as a vital component of Kenya’s economic landscape, supporting household consumption and enabling investments in key sectors such as real estate, education, and healthcare. Market analysts attribute the steady increase in these inflows to the diaspora’s continued confidence in the Kenyan economy.
In a bid to further enhance these contributions, the Kenyan government has announced ambitious plans to increase diaspora remittances to Sh1 trillion by 2027, up from the Sh671 billion sent last year. This goal underscores the importance of the diaspora community in driving economic growth and stability in Kenya.
With foreign exchange reserves remaining adequate at $7.856 billion (Sh1.01 trillion), equivalent to 4.1 months of import cover as of September 20, 2024, the role of remittances in supporting the country’s financial health cannot be overstated. As Kenyans abroad continue to invest in their homeland, the impact of these funds is expected to be felt across various sectors, further strengthening the economy.
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