Kenya seeks to tap more cash from diaspora

Deputy President William Ruto with Cabinet Secretary for Foreign Affairs Amina Mohamed and Principal Secretary Karanja Kibicho (right), at the Kenya Diaspora Easter Investment Conference at Windsor Golf Hotel and Country Club in Nairobi on April 2, 2015. PHOTO | PSCU |  

In Summary

• The government will also make it easy for them to buy Treasury Bonds and Treasury Bills among other government instruments such as diaspora bonds.
• Kenya has various ongoing infrastructure projects that are seeking to tap from private sector funds.
• Mr Muriuki said these funds could be tapped to provide better facilities to the public and contribute more to economic development.

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A number of incentives will be rolled out to enable Kenyans living abroad send more money home. They will be in form of investment packages in production ventures and management services for specific countries.

The government will also make it easy for them to buy Treasury Bonds and Treasury Bills among other government instruments such as diaspora bonds.

“We will also lower the transaction costs through such measures as duty waivers and make it easy for Kenyans abroad to participate in public-private partnership projects,” Foreign Affairs Cabinet Secretary Amina Mohammed said.

Kenya has various ongoing infrastructure projects that are seeking to tap from private sector funds. They include the 10,000-kilometre road annuity initiative, Konza ICT city and Lapsset that comprises construction of roads, railways, ports, airports and resort cities, among others.

Experts have been urging the government to seek ways in which part of the remittances can be channelled into putting up development projects. Most of the funds are sent to relatives, with real estate, food, education and health, consuming the lion’s share.

STRATEGIC ASSET
“We want to manage foreign remittances as a strategic asset. As much as we appreciate the $1.5 billion sent to the country in 2014, we want to deepen this to contribute more to the development of the country,” President Uhuru Kenyatta said last week when he opened the Kenya diaspora Easter investment conference at Windsor hotel, Nairobi. 

“Banks and other financial institutions should come up with instruments that can enable those living in the diaspora to invest in the country. You will get better returns investing in Kenya and we are working on creating instruments to facilitate that.

“Instead of getting one per cent, we can give you six per cent and on our part, instead of borrowing at 10 or 12 per cent, we can borrow at six per cent. So this becomes a win-win situation,” Deputy President William Ruto said during the event.

He said the government is keen on having an instrument to tap into diaspora funds by 2017, when the next meeting is planned. Mr Ruto said funds from Kenyans living abroad would soon play a greater role than the foreign direct investment. The government launched a diaspora policy in January.

ACCESS MORTGAGES

Co-operative Bank managing director Gideon Muriuki said several savings and credit societies had been formed by Kenyans living abroad, particularly in America, Britain, Qatar and the United Arab Emirates, which had enabled members to access mortgages and enhance personal savings.

He said the model could be used to harness funds from abroad to contribute more to the growth of the economy.

Mr Muriuki said these funds could be tapped to provide better facilities to the public and contribute more to economic development.

“We should have at least 25 per cent of the remittance inflows going to investment,” said Kenya Commercial Bank Chief Executive Officer Joshua Oigara during the meeting.