Remittances by Kenyans abroad growing and better monitored
Nairobi (Kenya) – Kenyans abroad sent home about Ksh6.9 billion in November 2011, a 43 per cent increase over November 2010 figures. Additionally, cumulative funds for the 12 months ending November 2011 were 37.8 per cent higher than a similar period in 2010.
Although there was a Ksh43 million drop between October and November, the data points towards a generally positive trend. The Central Bank of Kenya (CBK) has attributed this trend partly to better remittance monitoring processes.
“Since December, 2010, improved data collection techniques and proper classification of remittances by some commercial banks have contributed to this increase in remittances inflow,” said CBK’s research director Gitari Koori in a statement.
Diaspora remittances were ranked as Kenya’s fourth-largest foreign exchange earner in 2011 after tea, horticulture and tourism. Despite this, there have been allegations in the past that Kenya’s faulty record keeping has been vastly underestimating the true worth of remittances.
A report released by the World Bank last year put the amount of money sent in 2010 at about Ksh154 billion while the CBK reported only Ksh54.5 billion. Mr John Maina, who advises the Prime Minister’s office on diaspora affairs, places the number even higher at Ksh220 billion.
“CBK does not account for money transferred through informal channels. If a migrant asks a friend to bring back a couple of dollars to family, that’s still remitting,” he said.
If the World Bank figure were accepted as more accurate, diaspora remittances could eclipse top forex earners like agriculture and tourism. The lack of accurate figures greatly impedes policy making and national planning.
“We need to have a whole picture of what is going on if we are to develop good policies,” African affairs consultant Michael Orwa said in a past interview. In its statement, the CBK also noted increased engagement of Kenyans living abroad as a contributing factor to the positive figures.
A recent conference entitled the Diaspora Homecoming Conference informed Kenyans visiting for the holidays about their rights under the new constitutional dispensation that guarantees dual citizenship.
Additionally, calls for bids for Treasury infrastructure bonds have taken Kenyan emigrants into consideration.However, industry players say that more needs to be done with some suggesting the implementation of a diaspora bond, as has been the case in India and Israel. High costs continue to be prohibitive factors to people who send money.
According to the World Bank, Africa is the most expensive region to remit money with a single transfer costing an average 10 per cent of the amount send.However, the CBK has noted that increased competition among money transfer services is cutting down on the costs.
In November, the World Bank launched an online portal for migrants to compare pricings across different services thus encouraging competition and transparency in the sector.Meanwhile, M-Pesa has gone international encroaching on the turf of older players such as Western Union and Money Gram.