Families feel the pinch as war-hit diaspora remittances shrink

Hundreds of thousands of Kenyan households that depend on money sent home from relatives abroad are facing a deepening financial crisis after diaspora remittances fell sharply last month.

The drop is attributed to squeezed earnings, job losses in the Gulf and rising living costs for migrants caught in the two-month-old Middle East conflict.

Money sent to Kenya from its citizens overseas totalled Sh51.4 billion ($397.8 million) in April, down 11.7 per cent from Sh54.4 billion in March, according to data from the Central Bank of Kenya (CBK) released last week. 

The decline was driven by weaker inflows from key source markets, including Gulf Arab States, where the Iran-Israel war has upended employment.

For millions of Kenyans living hand-to-mouth, the drop could not come at a worse time. Domestic inflation accelerated to a two-year high of 5.6 per cent in April, eroding the purchasing power of every shilling that does arrive.

“We are suffering. Everything is expensive now – from food, transport, even cooking gas,” Jane Wanjiku, a 42-year-old food vendor in Naivasha, told Financial Standard earlier. “My business earnings cannot keep up.”

The CBK said 12-month cumulative remittances to April rose just 1.1 per cent to Sh653 billion, a sharp slowdown from previous years. 

The United States (US) remains the largest single source of diaspora remittances, but the Gulf corridor, the second biggest, has been hammered by the conflict that erupted on February 28.

Over 400,000 Kenyans work in Gulf countries, chiefly Saudi Arabia, the United Arab Emirates and Qatar. 

Remittances from Saudi Arabia crashed 25 per cent in 2025, even before the war began, and the outbreak of hostilities has since triggered layoffs in construction, hospitality and domestic service, Kenyan recruitment agents say.

Transport operators

The war has also driven up living costs for Kenyans in the Gulf and the US, leaving them with less to send home.

Food and fuel prices have spiked across the region, while landlords in Dubai and Doha have raised rents, migrant support groups report.

The impact has also been felt locally, with fuel and food prices going up.

Yesterday, transport operators paralysed operations across the country as they protested the high fuel prices. 

A kilo of tomatoes now costs Sh108.60, up 32.6 per cent from a year ago, according to the Kenya National Bureau of Statistics. Potatoes have risen 17.4 per cent while beef with bones climbed 11.1 per cent to Sh749.65. A 13-kg cooking gas cylinder sells for Sh3,362, up 6.5 per cent year-on-year. The CBK’s weekly bulletin noted that “inflation concerns remained elevated” due to high global energy prices from the “ongoing US-Israel-Iran war”.

International oil prices have surged, with Murban crude reaching $94.84 (Sh12,330) per barrel on May 14, up from $89.13 (Sh11,587) a week earlier.

For decades, Kenyan families have leaned heavily on diaspora relatives to survive tough times. An estimated four million citizens abroad send home billions each year, paying for school fees, medical bills, rent and food.

“Remittance inflows remain a key source of foreign exchange earnings and support to the balance of payments,” the CBK said in the bulletin. But analysts warn that sustained declines would force households to cut back on essentials and push more families into poverty.

The World Bank has already cut Kenya’s 2026 growth forecast to 4.4 per cent from 4.9 per cent, citing the Middle East conflict and its ripple effects.

The lender estimated that inflation could rise by four percentage points or more, shaving 2.6 per cent from household incomes. The Iran conflict defied early predictions of a short campaign, leading to sustained disruptions to trade, fuel and food supply chains.

US President Donald Trump initially forecast a four-to-five-week operation, but fighting expanded, and Iranian officials previously warned they were prepared for six months of warfare or longer. 

Global oil markets remain volatile. For now, Kenyan families like Wanjiku’s are left to stretch ever-shrinking resources. “Last year, I could save a little,” she said. “Now I just pray nothing else goes up.”