Kenyans living and working abroad sent home $2 billion (Sh258.9 billion at current conversion rates) during the first five months of the year, marking an 18.9 percent jump from the inflows recorded during a similar period last year on the back of easing inflationary pressures in developed economies.
Latest data from the Central Bank of Kenya (CBK) shows that Kenyans living in the diaspora remitted $404.4 million (Sh52.4 billion) in May to add onto the cumulative $1.6 billion (Sh207.2 billion) sent home during the four months to April.
“Remittance inflows remained strong, amounting to $404.4 million in May 2024… The US remained the largest source of remittances to Kenya, accounting for 48 percent in May 2024,” said the CBK.
The CBK has projected a year-on-year growth of 12 percent in remittances this year, which would raise the total annual flow from $4.19 billion (Sh542.5 billion) in 2023 to $4.69 billion (Sh607.3 billion) in 2024.
This would be the fastest annual percentage growth since 2021, when the volume of cash Kenyans abroad sent home rose 20 percent to $3.72 billion (Sh481.7 billion) as global economic activity recovered from the effects of the Covid-19 pandemic.
The highest inflows recorded this year so far was in January, when it stood at $412.4 million (Sh53.4 billion) as Kenyans working abroad wired funds to clear education bills for their kin back home who were reopening school for a new academic year.
The value remitted in January was followed by March’s, which stood at $407.8 million (Sh52.8 billion), May ($404.4 million), and April ($397.3 million (Sh51.4 billion), while February recorded the least at $385.9 million (Sh49.9 billion).
Amplified dollar inflows from Kenyans abroad have partly aided in easing pressure on the local shilling which had, as of yesterday, climbed to a 15-month high against the greenback exchanging at an average rate of Sh128.66, levels last seen on March 8 last year.
Since January of this year, the shilling has gained by 17 percent against the dollar, making it the best-performing African currency in the period versus the greenback.
Aside from the US, other top sources of remittances include Germany, Australia, the United Arab Emirates, Tanzania as well as Canada.
The improvement of the overall inflows’ performance follows the cooling off of the Russia-Ukraine conflict which had disrupted global supply chains, sending global inflation to decades-high levels.
The sky-high energy, food, and rent process due to the supply disruptions following Russia’s invasion of Ukraine in February 2022 had pushed up living costs in the US and Europe, eating into the disposable income that Kenyans in those economies tap to assist families and dependents back home.
Since 2015, remittances from abroad have remained the largest source of foreign cash flows into Kenya ahead of tourism, foreign direct investments as well as the export of agricultural products such as tea and coffee.
A CBK-commissioned survey in December 2021 showed that the largest share of the inflows goes into supporting families at home to buy food and household goods as well as pay medical bills and school.
