US, Europe diaspora dollars falls for three consecutive months
Kenyans in America, Europe and Australia cut support for their relatives back home slashing diaspora remittances by a 3.1 percent to Kes183.76 billion ($1.336 billion) in the four months to April from Kes189.68 billion ($1.379 billion) at the same stage last year.
Remittances fell for the third straight months in April by 9.8 percent to Kes44.1 billion ($320.3 mil-lion) from Kes48.8 billion ($355.04 mil-lion) in April 2021 led by a drop in America, Canada, UK, Netherlands, Sweden, France, Norway, Belgium and Australia.
Rising cost of living abroad has hit the amounts being sent home even as geopolitical instability has also affected Kenyans living abroad in countries such as Ukraine and the Sudan.
Slowdown in diaspora remittances may affect value of the Kenyan currency, which has been supported by the steady flow of dollars from Kenyan working abroad, bringing in more dollars than domestic exports.
The Kenyan shilling has declined to 137.06 against the US dollar as importers, corporates paying dividends and government debt demand for dollars put the local currency under pressure as receipts from diaspora, exports and debt reduce.
Dollars from Kenyans in America, the largest source of remittances, shrunk by 13 percent while foreign currency from Australia dropped by 60 percent.
Read also: Saudi Arabia overtakes UK as Kenya’s second leading dollar source
The United Kingdom that has traditionally been the second largest source of dollars continued to drop, losing 11.8 percent of remittances and has since been replaced by Saudi Arabia, whose dollar flows have been on the rise.
Dollar flows from the Kingdom of Saudi Arabia rose 22 percent in April signaling the growing importance of the oil-rich nation to Kenya’s diaspora flows.
While Saudi remittances have been growing, The Kingdom and other Gulf countries offer low-paying jobs such as housemaids, caregivers, drivers, and security guards who work in near-slavish conditions.
Central Bank said in the diaspora survey indicated that income levels are lowest in Asia and East Africa where the majority of respondents earn less than $2,000 per annum, which is a pointer to the type of jobs held by migrants, particularly in Asia where a high proportion of migrants take up low-skill jobs.
Cases of abuse have dominated the news about employment in the middle east blamed on agents, corruption in government and cultural differences.
The Foreign Affairs ministry is reportedly seeking a bilateral deal with Riyadh over a framework under which professionals will be recruited in the Middle East country to help stem the abuse that is the dark side of exported labour.
It is estimated that roughly 200,000 Kenyans have secured employment in Saudi, 60 percent of whom are professionals in sectors such as healthcare, ICT and construction.
