Diaspora inflows hit Sh7.5bn as State securities drive bears fruit
Kenyans living outside the country are sending an average of Sh7.5 billion every month, making diaspora remittances a key source of foreign exchange.
This has seen the remittances increase by 47 per cent in the first six months of 2012.
Increased inflow of remittances has been attributed to aggressive government efforts to draw Kenyans living in the diaspora to invest in government securities.
Real estate and property development are also popular investments for remittances.
However, research has shown that the majority of funds sent from abroad are used for domestic consumption.
Data from the Central Bank of Kenya (CBK) indicates that diaspora remittances amounted to Sh50.08 billion ($596.23 million), up from Sh34.14 billion ($406.5 million) sent in a similar period in 2011.
According to the CBK, the 12-month cumulative average remittances have been on an upward trend since the second half of 2010.
Remittances have also remained resilient despite a volatile global economic climate as Kenyans abroad sent money to cushion their relatives.
“Remittance inflows to Kenya have sustained an upward trend since 2010, and this is despite the weaker global economic environment,” said the CBK in a statement sent to the Nation in June.
Funds inflows from the diaspora have been fluctuating over the past three months, a fact that the Central Bank has attributed to seasonality. In 2011, the country received Sh74.85 billion in remittances.
Tea, horticulture and tourism, the other top foreign exchange earners, brought in Sh109 billion, Sh91.6 billion and Sh98 billion, respectively.
Kenyans sending money from North America accounted for 45 per cent of total remittances, with Sh3.75 billion despite a 13.44 per cent drop from May 2012 figures.
Europe accounted for about 30 per cent of total remittances while the rest of the world accounted for 25.04 per cent of total remittances, a 5.4 per cent drop.
Estimates from the Prime Minister’s office indicate that the Kenya diaspora is about three million.
In the US alone, it is estimated that there are between 400,000 to one million Kenyans.
This number could be even higher since there are many undocumented Kenyans living abroad.