The value of money sent by Kenyans living abroad rose 10.96 per cent to Sh177.34 billion ($1.72 billion) from Sh159.82 billion ($1.55 billion), fresh data from the Central Bank shows.
This means diaspora remittance remained the country’s largest source of foreign exchange earnings for the third straight year. They beat tea exports which earned the country about Sh124.5 billion and horticulture whose export value stood at Sh101.51billion, according to data collated by the Kenya National Bureau of Statistics.
“This shows that we have many Kenyans doing well, with disposable income and who are saving in order to bring in money for investment,” Kenya Investment Authority managing director Moses Ikiara said in a telephone interview.
The CBK data shows inflows from the US and Canada accounted for 51 percent of the total in December 2016, rising month-on-month 8.8 per cent to $82.2 million (Sh8.48 billion).
Remittance from Europe accounted for 29.1 per cent, while inflows from the rest of the world improved by 24.5 per cent from $25.7 million (Sh2.65 billion) in November to $32 million (Sh3.29 billion) in December.
Monthly remittance inflows hit the highest point in December 2016 at $160.9 million (Sh16.59 billion).
Ikiara said the diaspora inflows have been largely driven by investment in property and real estate development due to increased marketing by real estate companies. This has also been boosted by relatively high returns on investment in the sector and the fact that they don’t need to keep close attention on their investment, he added.
“Some of the challenges Kenyans abroad have been facing over the past years have been the loss of money when sending it directly to relatives for investment purposes. Now with the presence of real estate companies that are well organised, one can easily track their money,” said Ikiara.
The CBK data shows that the diaspora is now a key economic growth driver, accounting for about 2.5 per cent of the country’s wealth in October 2016 as measured by gross domestic product.
The Kenya Diaspora Policy unveiled in June 2014 cited the lack of sufficient sourcing and management of data on Kenyans abroad by the government as one of the key challenges in actualising the untapped potential of diaspora remittances.
Ikara, however, said there has been a significant improvement in the mobilisation of data on Kenyans abroad over the past five years through the country’s embassies and formation of diaspora member associations.
“You will find that in countries such as the US, UK, India and others, these member associations greatly influence how and where Kenyans abroad invest their money as the groups meet to exchange ideas, this is however not consistent in all countries,” said Ikiara.
CBK conducts a monthly survey on remittance inflows through formal channels including commercial banks and other authorized international remittance service providers in Kenya.