The Kenyan government is embarking on initiatives to bolster remittances from Kenyans residing abroad, with a target of reaching at least KES 1 trillion annually to enhance the nation’s foreign exchange reserves.
The State Department for Diaspora Affairs (SDDA) has initiated a search for a consultant to conduct a survey aimed at formulating a framework and strategy for augmenting remittances. This endeavor is in line with the government’s objective to achieve the KES 1 trillion benchmark by 2027, as outlined in a tender document.
Recent data from the Central Bank of Kenya (CBK) indicates that remittances have averaged approximately KES 568.7 billion over the past five years, with a 4.0% growth to KES 642.4 billion recorded last year. To attain the set targets by 2027, a growth rate of about 36% is necessary.
Notably, the data highlights a significant growth in remittances, rising by 50.2% from KES 446.1 billion in 2019 to KES 642.4 billion in 2023, indicating the feasibility of the targets even without additional interventions.
However, there is a slight concern regarding remittances from Kenyans in the United States, which constitute nearly 60% of all remittances from abroad. Despite this significant share, remittances from the US saw only a marginal increase of 0.3% to KES 373.2 billion.
This can be attributed to various factors, including inflationary pressures in the US affecting disposable income available for remittances. Nevertheless, CBK governor Kamau Thugge remains optimistic about the growth of US remittances, citing the robust economy and job market in the US. He anticipates continued growth in the amount of money sent home from the US in the foreseeable future.