Covid-19 Nosedives Diaspora Remittances to Kenya by 7.1pc in August

Latest data from the Central Bank of Kenya (CBK) has revealed that diaspora remittances to Kenya in August 2021 stood at 312 million dollars (34.4 billion shillings), compared to 336.7 million dollars (37.1 billion shillings) sent in July.

According to the regulator, the figures represented a 7.1 percent drop and were attributed, in part, to the Covid-19 pandemic.

Despite the drop, however, the figure is a significant improvement from the remittances posted in August 2020, which stood at 274.1 million dollars (30.2 billion shillings).

In 2021, the cumulative inflows for the 12 months to August amounted to 3,481 million dollars (383.6 billion shillings) compared to 2,921 million dollars (321.8 billion shillings) in the same period in 2020, a 19.2 percent increase.

The United States continues to be the biggest contributor to Kenya in terms of remittances. It accounted for 46.8 percent in August 2021. Other notable countries include the UK, Germany, and Canada.

Saudi Arabia, United Arab Emirates, Qatar, and Bahrain have also emerged as important drivers of diaspora remittances.

Tanzania, Uganda, and South Africa lead as the top African source markets for remittance inflows into Kenya.

The drop in remittances follows a UN report which had projected that remittances to African countries will drop by 5.4 percent in 2021 due to the loss of jobs by many migrants.

Apart from job losses, migrants are also face reduced incomes as the effects of the pandemic persist.

While the pandemic was expected to lead to a significant decrease in money sent to Africa in 2020,  World Bank revealed that the decline was slighter than previously projected.

Despite the drop in remittances, CBK data shows usable foreign exchange reserves remained adequate at 9,619 million dollars (1.06 trillion shillings) as of September 16.

This represents 5.88 months of import cover and meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover.

Remittances not only represent an important source of forex but also support many livelihoods. The main uses of these remittances include education, healthcare, and household needs.