- Kenya’s diaspora remittances in October increased by $18.7 million compared a month earlier.
- CBK in its weekly dispatch announced that the cumulative inflows for the 12 months to October 2024 increased by 15.3%.
- Despite the dollar inflows from diaspora remittances, Kenya’s currency weakened marginally against the USD in the week ending Nov 15.
Kenya’s diaspora remittances increased by $18.7 million (KSh2.4 billion) between September and October 2024, the latest data from the Central Bank shows. Kenyans living and working abroad wire home $437.2 million (KSh56.7 billion) in October, a significant increase from the $418.5 million (KSh54.4 billion) reported the previous month.
Compared to a similar period last year this was an increase of 22.9 per cent when the foreign remittance stood at Ksh46 billion ($355.6 million).
The Central Bank of Kenya (CBK) in its weekly bulletin published on Friday, November 15, announced that the cumulative inflows for the 12 months to October 2024 increased by 15.3 per cent. This saw the 12 month remittances grow to $4.8 billion (Sh623 billion) compared to $4.1 billion (Sh532 billion) in the same period last year.
“The remittance inflows continue to support the current account and the foreign exchange market. The US remains the largest source of remittances to Kenya, accounting for 53.7 percent in October 2024,” CBK noted.
The regulator in its announcement, revealed that the remittance inflows boosted the country’s current account and stabilized the foreign exchange market. A current account represents the country’s imports and exports of goods and services, payments made to foreign investors, and transfers such as foreign aid.
In 2024 alone, the months of January, August, September, and October recorded the months with the highest dollar inflow from diaspora remittances with October highlighted as the best-performing month.
Read also: Remittances to Kenya dropped to $371.6 million in June, marking a six month low
Kenya’s diaspora remittances
The central banks also noted that the country’s foreign reserves rose to their highest level in three years as dollar inflow from the recent International Monetary Fund (IMF) disbursement narrowed the current account deficit.
The Forex reserved held by the central bank rose by 8.6 per cent to $9.27 billion (Sh1.2 trillion) by November 14, compared to a week earlier, sufficient to pay for 4.8 months of imports.
“The usable foreign exchange reserves remained adequate at $9,276 million as of November 14. This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover,” read part of CBK’s bulletin.
Despite the dollar inflows from diaspora remittances, Kenya’s currency weakened marginally against the United States Dollar in the week ending November 15.
As of Friday, November 15, the central bank quoted the Kenyan shilling trading at 129.35 per US dollar compared to 129.20 per US dollar on November 7, 2024. The local currency weakened slightly against the dollar as traders said the US currency had strengthened globally following the presidential election, thus increasing the demand for foreign currency.
Read also: Africa’s remittance market on the path to $500 billion by 2035
Diaspora remittance trends
An earlier report by Central Bank of Kenya had indicated that girlfriends are competing wives in receipt of monies from Kenyans living and working abroad. The survey that put mothers as the top recipients revealed that Kenyans are sending money to their female friends almost as frequently as their wives. Though 57 per cent of respondents were married, they first send money to their mother, then wives and girlfriends.
The CBK survey shows that four percent of the respondents said they send money to their girlfriends while 5 per cent send money to their wives mainly on a monthly basis.
The survey shows that 20 per cent of Kenyans abroad send money to their mothers followed by sisters at 15 per cent while brothers sit at 14 per cent. It comes days after the government increased oversight on money being sent home by foreigners. In recent months, the government intercepted more than Sh210 million from a Belgian boyfriend sent to a 21-year old girlfriend on suspicion that it is proceeds of crime
The respondents revealed their most preferred service provider was M-PESA by Safaricom which was selected by 20 per cent of the respondents, followed by banks World Remit, Wave, Sendwave and Western Union.
On most dominant service providers, the cost of sending funds was in the range of 4-5 percent of the amount remitted. The report showed that the use of courier companies was the most expensive channel of sending money in 2019, costing 29.2 per cent of the value remitted.
Respondents cited that their main challenge in sending money to their relatives and friends was the cost of remitting which included hidden charges, fees and transfer time. Transfer time was a challenge as many of the respondents were sending money to meet basic needs such as food, rent and medical expenses.
The respondents also cited fraud, fake and misleading information, slow and unresponsive institutions made it difficult for them to invest in Kenya.
