Kenyans abroad fuel economy as inflows hit Sh584b in 12 months
Business
By
Brian Ngugi
| Mar 18, 2024
Kenyans working and living abroad sent home a record Sh52 billion last month, official data shows.
The money sent home was 24.8 per cent higher than the Sh41 billion sent a year before in 2023 according to the weekly Central Bank of Kenya (CBK) weekly bulletin.
The record remittances calculated at Friday's exchange rate of Sh135 to the dollar indicate the Kenyan diaspora continues to defy global economic headwinds to help their families survive a ballooning cost of living.
"Remittance inflows amounted to $385.9 million (Sh52.5 billion) in February 2024, compared to $309.2 million (Sh41 billion) in February 2023, an increase of 24.8 per cent," said the banking regulator.
According to the CBK, cumulative inflows for the 12 months to February 2024 totalled $4,330 million (Sh584 billion) compared to $4,026 million (Sh543 billion) in a similar period in 2023, an increase of 7.5 per cent. CBK data shows Kenyans working in the US remain the largest contributors to the remittances sending more than half of all the contributions.
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"The US remained the largest source of remittances to Kenya, accounting for 54 per cent in February 2024," said CBK.
The rise in diaspora remittances defied varied projections that the remittances by Kenyans would drop in the face of rising global prices, which have adversely affected migrants' real incomes and piled pressure on the budgets for Kenyans in the diaspora.
The record remittances earned and helped shore up the country's foreign currency which has rallied against the shilling in recent weeks.
Remittances are a vital source of household income for Kenya. According to the World Bank, they alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrolment rates for children in disadvantaged households.
Studies show that remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters.
"Remittances lift people out of poverty, put food on the table, pay for education, cover health expenses, allow housing investments and many other family goals beyond consumption," said the President of the International Fund for Agricultural Development (IFAD) Gilbert Houngbo at a past event marking the International Day of Family Remittances.
A reopening of host economies as Covid-19 receded, supported migrants' employment and their ability to continue helping their families back home. Rising prices, on the other hand, adversely affected migrants' real incomes. "Migrants help to ease tight labour markets in host countries while supporting their families through remittances.
Inclusive social protection policies have helped workers weather the income and employment uncertainties created by Covid-19," said World Bank Global Director for Social Protection and Jobs Michal Rutkowski.