Upward And Onward: A Yearly Upswing In Diaspora Remittance Inflows Prevails

As of November 2023, the cumulative diaspora remittances stood at USD 3.82bn, a 4.0% increase from USD 3.67bn recorded over the same period in 2022.

Historical data indicates a recurring upward trend in remittance inflows during December, reinforcing our projection of at least a 4% year-on-year increase from 2022.

This increase is attributed to the alleviation of global inflationary pressures, particularly in the United States, consistently enhancing the disposable income of Kenyans abroad – approximately 58.0% of Kenya’s remittances in 2023 originated from North America.

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Kenya’s domestic debt stock had increased by 12.7% to KES 5.04tn as of 22nd December 2023, from KES 4.47tn over a similar period in 2022.

Treasury bonds accounted for 84.79%, a 199bps increase from 82.8% in 2022 while Treasury bills accounted for 10.3%, a 417bps decline from 15.0%.

The increase in the portion of debt in bonds can be attributed to the higher demand, especially for infrastructure bonds which offered very attractive returns relative to their tenor.

Banking institutions remained the largest holders of the government’s domestic debt. However, the allocation declined by 120.0 bps to 45.9%, from 47.1%.

What stood out in 2023 was the dramatic increase in debt held by retail investors (493bps up to 11.3%, from 6.4%) as the investors took advantage of the high interest rates in the fixed-income market.

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