Kenyan remittances from Uganda tripled to over a billion, the highest in recent CBK records, as the East African nation helped sustain a decline in flows from America, Australia and most parts of Europe.
Remittances from Uganda grew threefold from $2.5 million (Kes349 million) in May last year to $8.8 million (Kes1.2 billion) this May, even as Saudi Arabia continued to gain prominence as the second largest source of Kenya’s dollars with a 30 percent growth in remittances to $35 million (Kes4.8 billion).
Total remittance inflows in May hit $352.1 million (Kes49.22 billion), Central Bank of Kenya latest data indicates, compared to $339.6 million (Kes47.4 billion) in May last year, an increase of about 3.5 per cent.
Remittances are rebounding following a three month slumps as flows from traditional markets declined on higher inflation and poor job prospects in the west. Dollars from America dipped three percent to $189.2 million even as dollars from Australia dipped aggressively almost 45 percent to $5.9 million.
Kenyan workers abroad are struggling to meet their own needs as the developed world enters a recessionary period which is bound to cut their support for family at home.
A Central Bank survey shows that Kenyans living abroad also struggle to send money home due to his cost of transfer, unfavorable exchange rates hence high conversion costs and limits on mobile transfers as well as lack of interoperability back home.
CBK however believes remittances will rebound especially as regulators pause rate hikes and job prospects improve.
The rising number of Kenyans living and working in the diaspora—who are clocking in $4.027 billion into the country annually have become a crucial source of dollars in Kenya.
Higher remittances provides shilling coverage by increasing dollar supply since remittances have become one of Kenya’s leading sources of forex.