Kenyans working abroad sent home Sh36.02 billion ($329.1 million) in November, helping cumulative remittances for 11 months to race past the money that was received in the full year ended 2020.
Central Bank of Kenya (CBK) data shows the November inflows were, however, a drop from Sh37.97 billion ($337.4 million) sent in October, which was a record for remittances in a single month.
Kenya has now received Sh377.01 billion as diaspora remittances in the 11 months, overtaking the Sh348.17 billion (3.094 billion) that was received in the whole of last year as source markets such as Britain and US battled Covid-19 disruptions.
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North America, which includes Canada, the United States and Mexico, continued to lead on remittances followed by Europe.
“The United States remains the largest source of remittances into Kenya, accounting for 67.3 per cent in November 2021,” said CBK.
The remittances are 20.5 per cent more than the Sh312.89 billion the country received in a similar period last year.
The cumulative remittances for 2021 are nearly double the Sh15.16 billion that Kenyans sent home in a similar period five years ago.
CBK conducts a survey on remittance inflows every month through formal channels that include commercial banks and other authorised international remittances service providers.
Kenya tops in diaspora remittances in the East African region and the amount the country receives makes up the single largest source of foreign currency ahead of major crops and tourism.
The remittances in 2015 overtook earnings from tea exports to become the country’s largest source of foreign exchange.
Other key sources of foreign exchange include tourism as well as horticulture and coffee exports.
Increased growth in remittances reinforces the outlook in the 2019 Migration and Development report that receipts from citizens working abroad were on track to becoming the “largest source of external financing in developing countries.”
Remittances have been rising despite the fact that the costs for many African countries remain high when compared to United Nations’ recommendations that they should not exceed three per cent of total value of money being sent.
Kenya’s strong remittances have helped the usable foreign exchange reserves remain within the required minimum of four-month import cover and East African Community’s convergence criteria of 4.5 months.
Import cover as at Thursday last week stood at Sh982.4 billion ($8.73 billion)—enough to cover import needs for about 5.34 months.
However, the growing remittances and the import cover have not stopped the shilling from weakening against the US dollar.
The shilling opened yesterday averaging 112.89 units to the dollar—the lowest point ever—raising fears of expensive imports and increased cost of servicing dollar-denominated debts.
palushula@standardmedia.co.ke
