Kenyans working and living abroad sent home a record Sh498.8 billion last year, official data shows.
The record remittances indicated how the Kenyan diaspora defied global economic headwinds and helped their families survive a ballooning in storm.
The money sent home was 8.34 per cent higher (the equivalent of Sh38.39 billion) than the Sh460.41 billion sent a year before in 2021, according to the weekly KCB weekly bulletin.
The rise in diaspora remittances defied varied projections that the remittances by Kenyans would drop in the face of rising global prices, which have adversely affected migrants’ real incomes and piled pressure on the budgets for Kenyans in the diaspora.
“Remittance inflows in 2022 reached an all-time record of $4.028 billion (Sh498.8 billion), an increase of 8.3 per cent compared to $3.718 billion (Sh460.4 billion) in 2021,” said CBK.
The inflows were strong in December 2022, which coincides with the Christmas festive season at $357.3 million (Sh44.2 billion), an increase of 3.4 per cent compared to $345.4 million (Sh42.7 billion) in November.
The Christmas and New Year holidays in Kenya are marked by extensive travel and upcountry rush for large family gatherings, where the purse strings are loosened.
The start of the New Year is also marked by the reopening of schools.
CBK data shows Kenyans working in the US remain the largest contributors to the remittances sending more than half of all the contributions. “The US remains the largest source of remittances into Kenya, accounting for 55.5 per cent in December,” said the CBK.
CBK said the record remittances earned and helped shore up the country’s foreign currency which has come under pressure in recent months.
The usable foreign exchange reserves stood at $7.415 billion (Sh918.2 billion) representing 4.15 months of import cover as of January 12, 2023, which is however lower than the $7.537 billion (Sh933.3 billion) (4.22 months of import cover) reported earlier on December 2022 by the CBK. “Remittance inflows continue to support the current account and the foreign exchange market,” said the CBK.
Remittances are a vital source of household income for Kenya.
According to the World Bank, they alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrollment rates for children in disadvantaged households.
Studies show that remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters.
“Remittances lift people out of poverty, put food on the table, pay for education, cover health expenses, allow housing investments and many other family goals beyond consumption,” said the President of the International Fund for Agricultural Development (IFAD) Gilbert F. Houngbo at a past event marking the International Day of Family Remittances.
Remittance flows to developing regions like Kenya were shaped by several factors in 2022, according to the World Bank. A reopening of host economies as Covid-19 receded, supported migrants’ employment and their ability to continue helping their families back home.
Rising prices, on the other hand, adversely affected migrants’ real incomes.
“Migrants help to ease tight labour markets in host countries while supporting their families through remittances. Inclusive social protection policies have helped workers weather the income and employment uncertainties created by the Covid-19 pandemic,” said World Bank Global Director for Social Protection and Jobs.
