Kenya’s Diaspora Remittances plunge to record low

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Nairobi, Kenya's capital city and economic hub

NAIROBI – Kenya’s diaspora remittances plunged to a record low as Coronavirus takes a toll on the pockets of Kenyans working abroad. According to the Kenyan Central Bank (CBK), diaspora remittances declined by 9% in the month of April. Kenyans in Diaspora sent home $208 million, the lowest since February last year. Data from the Central Bank of Kenya (CBK) indicated that Kenya received close $229 million in March, higher than that of April by 9%, this is due the Lockdown which affected economic production in countries where Kenyan expats are based.

The Kenyan Central Bank (CBK) expects diaspora remittances to fall by as much as 15% cumulatively for the year of 2020. Diaspora remittances are Kenya’s biggest source of foreign currency. The economic shocks caused by Covid-19 will have far-reaching consequences on the economy of Kenya according to CBK.

“Remittance flows from the US and Canada (contributing about 58 per cent of all remittances in April) remained largely unchanged from March, while inflows from UK, Germany, South Africa, EAC region, United Arab Emirates and Saudi Arabia declined, reflecting the impact of Covid-19,” said CBK.

Diaspora remittances are a critical part of many low income and middle income economies around the world. In some instances, diaspora remittances surpass Foreign Direct Investment (FDI). Data from the World Bank estimates those payments may fall 20% to $445 billion this year, from a record $554 billion in 2019. Sub-Saharan Africa is expected to have the biggest slump by 23,1% to $37 billion in 2020, compared to 2019 where Africans sent $48 billion home.

On the continent Nigeria is the largest recipient of remittances, and is the sixth-largest beneficiary among low- to middle-income countries. Having received $23.8 billion, in 2019, the Nigerian authorities also expect a decline in total remittances for this year.

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