Kenyans abroad sent home a record Ksh.341 billion in 2020

Kenyans living and working abroad sent home a record Ksh.341 billion in 2020, growing their remittances by 10.7 per cent from Ksh.308 billion in 2019.

The improved foreign currency inflows were against the global economic devastation caused by the COVID-19 pandemic which equally hit out at remittance source countries.

The remittances peaked at their highest during the month of December with the flows reaching a new monthly record of Ksh.32.9 billion ($299 million).

The Central Bank of Kenya (CBK) has attributed the growth in remittances to innovations providing for more efficient means for Kenyans abroad to send back cash.

“This remarkable growth of remittances has been supported by financial innovations that provided Kenyans in the diaspora more convenient channels for their transactions,” the CBK said on Friday.

The growth in the remittances has however come as a surprise for the reserve bank which had earlier in the year predicted a hit to the key dollar inflows for Kenya.

“It was expected that earnings from the diaspora would decline with entities such as the World Bank predicting a 20 per cent shortfall. We haven’t seen that,” CBK Governor Patrick Njoroge said in July last year.

Nevertheless, Kenyans abroad have historically endeavored to send cash back home particularly in moments when the country is undergoing a tough economic phase.

Last year, the inflows were greatly boosted by stimulus cheques in developed countries which served to plug households funding during the pandemic.

Remittances are seen as an important cog to not just households’ income in the country but also government through their contribution of nearly one-third of the CBK’s usable foreign currency reserves which are used to partly settle external debt and cushion the shilling.

The CBK has in retrospect announced its first ever diaspora remittances survey to be conducted between February and March this year with the aim of collecting valuable information on the inflows to guide policy.

The survey comes on the backdrop of increased interactions between government agencies and Kenya’s diaspora community to grow and increase the range of benefits from the inflows.

For instance, the Capital Markets Authority (CMA) has eyed a piece of the diaspora cake as it mulls the setting up of a diaspora bond to serve as an additional investment vehicle for Kenyan diaspora monies.