Australia, Canada, and the United Arab Emirates have emerged as Kenya’s fastest-growing source markets of remittance dollars this year, pointing to increased labour immigration into the countries.
Central Bank of Kenya (CBK) data on diaspora remittances segregated by source market shows that in the first five months of this year, inflows from Australia have gone up by 99 percent to $64.13 million (Sh8.24 billion at present exchange rate).
Inflows from Canada have gone up by 90 percent in the period to $50.32 million (Sh6.47 billion), while the UAE flows have risen by 59 percent to $48.1 million (Sh6.2 billion).
Germany has also emerged as a fast-growing source of external dollars, with its flows rising by 46 percent to $89.3 million (Sh11.5 billion) in the period.
While remittances from these countries are still well below those from the US, Saudi Arabia, and the UK, their faster relative growth indicates that Kenyans are seeking labour opportunities from a wider range of countries compared to past years, when the UK and the US were the most preferred destinations.
According to the CBK, the wider pool of countries contributing to the diaspora dollar basket is one of the factors behind this year’s faster growth of inflows.
Overall diaspora remittances in the five months to May hit $2 billion (Sh258.1 billion), representing a 19 percent jump from the $1.69 billion (Sh217 billion) Kenyans abroad sent home last year.
In the corresponding period in 2023 (comparison to 2022), remittances shrunk by 1.8 percent, as per CBK data.
“The US continues to be the main source of remittances, but remittances are now coming from many countries, and so to that extent, they are resilient, so that when one country does not perform, others perform,” said CBK governor Kamau Thugge in a briefing earlier this month.
“That’s why we have been able to sustain an increase in remittances even when there is a slowdown in global economic growth.”
The three main remittance markets of the US, Saudi Arabia, and the UK saw their volumes grow by 9.4 percent, 13 percent, and 18 percent respectively to $1.06 billion (Sh135.6 billion), $173 million (Sh22.2 billion) and $158.9 million (Sh20.4 billion).
Saudi Arabia’s growth to surpass the UK has been driven by domestic labour immigration to the Gulf economy.
Similar export of labour has also been driving the growth of UAE remittances, as the Gulf economies open themselves up to foreign investments and new businesses in a push to wean themselves off dependence on oil.
Skilled Kenyan labour—especially in the healthcare sector— is also finding a home in Canada in North America, while a growing number of Kenyan students enrolling in Australian tertiary institutions are providing a base for employment and remittances from the country.
