Kenya’s diaspora remittances to hit record high: World Bank
Kenya’s diaspora remittances are expected to hit a new record high of Sh285.5 billion in 2019, but growth will be at the slowest pace since 2015, fresh World Bank data shows.
The rate of growth of remittance inflows will rise by just 5 percent compared to a 39 percent growth between 2017 and 2018.
Kenya’s remittances are up by Sh13.6 billion year to-date compared to 2018.
The lower rate of growth is a reflection of mounting economic concerns in the United States and the United Kingdom where analysts say a recession is on the horizon despite strong employment data in the US.
The data also shows that Kenya is the fourth largest recipient of remittances in Africa after Egypt, Nigeria and Ghana.
Remittances in Kenya are now the biggest source of foreign exchange, ahead of tourism, tea, coffee and horticulture exports.
Most of the remittances came from the United States and Britain. Uganda is the third biggest source of remittances to Kenya with an estimated Sh19 billion flowing into Kenya in 2018 from Uganda.
Uganda is closely followed by Tanzania, Canada and Australia.
Kenya, however, is one of countries that are least dependent on remittances since they only form 3 percent of GDP.
Remittances account for upto 6 percent of Nigeria’s GDP and 15 percent of GDP for Lesotho.
Egypt receives Sh2.6 trillion from remittance inflows while Nigeria gets Sh2.5 trillion in remittance inflows.
Kenya has an estimated diaspora population of 1.08 million but the number could be as high as 3 million due to a high population of undocumented migrants working especially in informal labour.
The World Bank report however does not capture the inflows from sources such as Saudi Arabia, UAE and other Middle East countries where many semi-skilled Kenyans are domiciled.
China however remains one of the lowest sources of remittances for Kenya despite its rising economic influence mainly due to strict immigration and employment policies.
Burundi, Souh Africa and Tanzania receive some of the lowest amounts of remittances on the continent. The amount of inflows is dependent on factors such as diaspora population and level of skilled labour in the diaspora.
Uganda is expected to get 150 billion while Tanzania will get Sh95 billion with Rwanda getting Sh25 billion in 2019.
With the world slipping into a recession it is feared that remittance inflows may suffer as companies layoff staff in the developed world even as employers and employees adopt austerity measures.
A drop in the cost of sending money home due to multiple channels have also boosted the volume of remittances as less is spent of fees and charges.
Remittance are used for paying school fees, investment and for basic needs such as food and clothing.
India is seen getting a record Sh780 billion in remittance inflows followed by China with Sh700 billion. India has a diaspora population of 17 million making her the largest remittance receiver in the world.