Investment Promotions Principal Secretary Abubakar Hassan in an interview with KBC on Wednesday revealed the main challenges leading to low remittances in the country.
The PS explained that some Kenyans in the diaspora are reluctant to send money back home due to a lack of trust. He argued that they were worried the money was being used for consumption, not investment.
However, the PS revealed a plan to reassure Kenyans in the diaspora to increase the amount sent back home annually.
“I want to assure them that we have investment vehicles in Kenya and that if they invest their money will be safe,” he added.
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According to Hassan, the global diaspora market is about USD600 billion but only USD100 billion comes to Africa while Kenya has only attracted USD4 billion.
“We have looked at the research and that USD4 billion accounts for only 5% of the disposable income of our diaspora guys. If they can give us 10% we can just double from USD4 billion to USD8 billion,” he added.
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The PS emphasised that Kenya had an array of investment opportunities for Kenyans adding that the current administration was expanding this to not only be attractive to Kenyans but to other investors.
He also defended the numerous foreign trips taken by the President and other officials in relevant sectors such as trade adding that there were necessary to negotiate deals and strategically position Kenya globally.
On remittances, in 2023 Kenyans abroad sent back over Ksh538.2 billion emerging third among African countries which received the highest share of diaspora remittance in Africa. Countries ahead of Kenya were Nigeria and Ghana at Ksh2.6 trillion and Ksh627.8 billion respectively.
The government in February announced a plan to raise the remittances to Ksh1 trillion in line with President William Ruto’s directive. The government unveiled three ways to achieve this goal.
One of the measures is through taxation which will include the Kenya Revenue Authority (KRA), conducting tax sensitisation for Kenyans living abroad. The government will also implement a saving scheme for Kenyans, which will allow Kenyans abroad to contribute towards investment in the country.
Additionally, the government will introduce a diaspora bond which will be sold to Kenyans living abroad. This is expected to lure and incentivise Kenyans to invest back home.
BY
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Low Remittances: Kenyan Diaspora Reluctant to Send Money Back
