June diaspora remittances fall to Sh48Bn, lowest in half a year
Diaspora remittances to Kenya in June dipped to the lowest in six months with Kenyans living and working abroad wiring home about Kes48.87 billion ($371.6 million).
Although the amount was a 7.4 percent increase compared to a similar month last year, it was a decline from the Kes53.13 billion ($404 million) sent in May, Kes52.2 billion ($397 million) recorded in April as well as the Kes53.5 billion ($407 million) received in March.
According to the latest update from the Central Bank of Kenya, remittance inflows for the 12 months ending June remained steady at Kes595.7 billion ($4.53 billion). This was an increase of 12.9 percent compared to the $4.02 billion reported in the year to June 2023.
“The remittance inflows continue to support the current and the foreign exchange market,” CBK noted in a statement.
Kenyans working in the US continued to be the biggest source of remittances, accounting for 54 percent of the monies wired to Kenya from abroad in June.
According to the Central Bank Banking Supervision Report 2023, the largest source of diaspora remittances was from North America (US and Canada) and Europe.
In 2023 the total outflows increased from Kes70 billion to Kes87 billion mainly attributed to increased remittances to destination countries in the East African region.
Read also: Diaspora inflows surge to Sh670Bn amid shilling’s slide
Digital channels
“Digital channels are efficient and have enabled prompt transfers to recipient’s bank accounts and mobile wallets,” the CBK supervision report states in part.
According to the World Bank, sending remittances remains too costly, especially in Africa. In the fourth quarter of 2023, the global average cost of sending $200 was 6.4 percent of the amount being sent, slightly up from 6.2 percent a year earlier and well above the SDG target of 3 percent, the World Bank notes in a June update.
However, the global lender added that remittances via digital platforms posted a lower cost of 5 percent, compared with seven percent for non-digital methods, reflecting the benefits of technological advancements in reducing the financial burden on migrants.
Across Sub-Saharan African economies, remittance flows hit $54 billion last year, a slight decrease of 0.3 percent compared to 2022. The World Bank observed that monies sent home by Africans living and working abroad supported the current accounts of several African countries that were dealing with food insecurity, drought, supply chain disruptions, floods, and debt-servicing difficulties.
“Countries heavily dependent on remittances include the Gambia, Lesotho, Comoros, Liberia, and Cabo Verde. Flows are projected to grow by 1.5 percent in 2024,” notes the World Bank.
