Kenyans Used Ksh 2.4 Billion As Costs To Send Cash From Abroad

Kenyan diasporans are using at least 2.4 billion shillings per month in remittance costs as they send money back to their families in Kenya according to the data released by the Central Bank of Kenya.

Kenyans using banks to send money back home from the diaspora are paying more than those using digital platforms such as PayPal and M-Pesa.

In a period of 10 months, Kenyans spent 34.3 billion shillings in costs while transacting from abroad. This was a 28.5 percent increase from the same time in 2020.

“The issue of cost is a big concern, not just for Kenya but around the world, especially those countries in the emerging markets which are recipients of a large number of remittances,” said CBK governor Patrick Njoroge on Tuesday.

He added that the CBK survey on remittances that was carried out earlier this year and whose results would be published soon would help in the efforts to bring down costs.

At the same time, CBK said that the global economy continues to strengthen, largely supported by the ongoing deployment of vaccines, improved business investment and consumer spending, and accommodative policy measures.

The recently released GDP data indicates that the Kenyan economy rebounded strongly in the first half of 2021, mainly reflecting the recovery in economic activity following the easing of COVID-19 restrictions.

Real GDP grew by 10.1 percent in the second quarter of 2021 compared to a contraction of 4.7 percent in the second quarter of 2020. This reflects the strong recovery of the services sector particularly in transport and storage, education, information and communication, wholesale and retail trade, and the improved performance of the construction and manufacturing sectors.

Leading economic indicators point to a continuing recovery in the second half of 2021 also boosted by the full reopening of the economy.

Economic growth is expected to remain strong in 2022, with the normalization of domestic economic activities, as well as an easing of global supply chain constraints, and stronger global demand.

At the same time, the CBK foreign exchange reserves, which currently stand at USD8,768 million (5.36 months of import cover), continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market.