Kenyans living abroad increased their remittances back home by $72.9 million (Sh9.4 billion) in August 2024, bringing the total to $427.2 million (Sh55.09 billion). This marks a 20.6% rise compared to August 2023, representing the highest remittance amount ever received from citizens overseas.
In the year leading up to August 2024, cumulative inflows reached $4.645 billion (Sh593 billion), up from $4.120 billion (Sh529 billion) in the previous year, reflecting a 12.7% increase. This growth is attributed to favorable economic conditions following a reduction in the federal rate.
The remittance inflows for August 2024 were $427.2 million, compared to $354.3 million in August 2023. The Central Bank of Kenya (CBK) noted that these remittances continue to support the current account and foreign exchange market.
The United States remains the largest source of remittances, accounting for 56% of the total in August 2024. Other significant sources include the United Kingdom, Canada, and the Middle East, which together contribute significantly to Kenya’s foreign exchange earnings.
Over the past four years, remittances have been crucial to Kenya’s economy, supporting household consumption and investments in sectors like real estate, education, and healthcare. Analysts suggest that the steady rise in remittance inflows indicates strong confidence in Kenya’s economy among the diaspora.
To leverage this growth, the government aims to increase diaspora remittances to Sh1 trillion by 2027, up from Sh671 billion sent last year. These inflows also bolster the country’s foreign exchange reserves, which stood at $7.856 billion (Sh1.01 trillion) as of September 20, 2024, sufficient for 4.1 months of imports, meeting CBK’s requirement for import cover.
Education, healthcare, and household needs are the primary uses of these remittances, with Kenya being one of the top recipients in Africa. In recent years, Kenyans abroad have also increased their investments in real estate and capital markets, particularly in the US, Canada, and the UK.
