Diaspora Remittances Drop For The First Time In 13 Years

The amount of money sent by Kenyans living abroad back to their families and friends in Kenya for the three months to March this year dropped for the first time in 13 years according to the latest stats released by the Central Bank of Kenya.

According to the stats from CBK, remittances dropped to $1.016 billion (137.4 billion shillings) in the quarter to March from $1.024 billion (138.5 billion shillings) in the same period last year.

“This signals that the cost of living in the source countries is putting pressure on remittances. Individuals, for instance, might be forced to put aside more income to meet rising expenses, reducing the pool of funds available to send back home as remittances,” said Ronny Chokaa, a research analyst at Genghis Capital.

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It is, however, not known whether the CBK might have missed some transactions given that most Kenyans in the diaspora now prefer using digital platforms.

Digital money transfer services are now the preferred remittance channel for millions of Kenyan migrants living and working in the diaspora, thanks to their online nature that allows migrants to send and receive on their own schedule, in their preferred way.

Data from Zepz Group shows that its users globally sent almost $2 billion USD to Kenya in 2022 through its two digital money transfer channels, WorldRemit and Sendwave. In comparison, Zepz users sent over $500 million to Zimbabwe, $300 million to Cameroon, and more than $190 million to South Africa during the period, making Kenya a top market for digital remittance flows into Africa.

Related Content: Why Do Kenyans In The Diaspora Love Digital Remittance Platforms?

The CBK data show that remittances from countries like the US, India, and Qatar dropped in January and February. Cash sent home by Kenyans in the US fell by $8.9 million (1.2 billion shillings) in the two months.

Inflation has started to show signs of easing from the multi-decade highs reached in many countries following Russia’s invasion of Ukraine.

Kenyans in foreign countries in the past tended to send in more cash to support families and friends during times of economic crises or slowdown, inflows which also provided a buffer for the shilling against major international currencies, particularly the US dollar.

Related Content: Inflation Forces Migrants to Reduce Remittances Back Home