Kenyans living abroad sent home an average Sh6.33 billion weekly in 2020 despite the economic weigh-down of the Covid-19 pandemic, new data shows. FILE PHOTO | NMG
Summary
- Kenyans living abroad sent home an average Sh6.33 billion weekly in 2020 despite the economic weigh-down of the Covid-19 pandemic, new data shows.
- Fresh Central Bank of Kenya (CBK) data shows that diaspora remittances hit Sh329.41 billion ($3.094 billion) last year, being a growth of 10.7 percent from Sh285.23 billion ($2.796 billion) that was sent home the previous year.
- This means about Sh6.33 billion was sent home every week, deepening the share of remittances in the country’s foreign exchange receipts.
Kenyans living abroad sent home an average Sh6.33 billion weekly in 2020 despite the economic weigh-down of the Covid-19 pandemic, new data shows.
Fresh Central Bank of Kenya (CBK) data shows that diaspora remittances hit Sh329.41 billion ($3.094 billion) last year, being a growth of 10.7 percent from Sh285.23 billion ($2.796 billion) that was sent home the previous year.
This means about Sh6.33 billion was sent home every week, deepening the share of remittances in the country’s foreign exchange receipts.
“Remittance inflows were strongly buoyant in 2020 despite the devastation by Covid-19 in the source countries,” said CBK governor Patrick Njoroge.
“This remarkable growth of remittances has been supported by financial innovations that provided Kenyans in the diaspora more convenient channels for their transactions.”
The total remittances were 9.56 percent higher than the maximum of Sh300.67 billion ($2.824 billion) that Dr Njoroge had projected in July last year.
The unprecedented Covid-induced economic disruption that had hit countries such as the US and UK had seen the CBK project a 12 percent fall in remittances to Sh232.2 billion due to job cuts.
However, the apex bank revised this to a growth of just one percent on the back of a strong recovery in June.
The strong performance came on the back of December remittances hitting Sh32.91 billion ($299 million) — the all-time high to have ever been sent home in a single month.
December is historically a strong month for remittances when people in America and other stations send home Christmas presents and school fees payments.
US is the largest country in terms of the inflow contributions. However, the country has emerged as a global hotspot for Covid-19 infections and also faced tensions in the recently concluded elections.
Washington-based Pew Research Centre’s previous estimates showed some 90,000 Kenyans are living in the US, including as many as 30,000 without authorisation.
Inflows from the United Kingdom, Saudi Arabia, Qatar and Germany also make up key contributions.
Diaspora remittances had dipped to $208.22 million in April—barely a month after Kenya reporting the first Covid-19 case in mid-March but started rebounding in months that followed.
The remittances were boosted by recoveries in major economies abroad and by more ways to send cash, including straight to the recipients’ mobile phones.
Kenya’s strong remittances also defied the average dip of about 20 percent that the World Bank projected to hit combined remittances across the world due to the infectious virus.
The World Bank outlook was majorly pegged on the fact that Covid-19 had disrupted economic activities and sparked salary cuts and job losses across the globe.
The CBK conducts a survey on remittance inflows every month through formal channels that include commercial banks and other authorised international remittances service providers in Kenya.
Currently, Kenya tops in diaspora remittances in the Eastern African region and the amount the country receives constitutes the single largest source of foreign currency ahead of major crops and tourism.
The remittances have been the country’s largest source of foreign exchange since 2015 when they overtook earnings from tea exports. Other key sources of foreign exchange include tourism receipts as well as horticulture and coffee exports.
The continued growth also defies the fact that remittance costs for many African countries remain high compared to United Nations’ recommendations that remittance costs should not exceed three percent of value of money being sent.
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