According to the latest data from the Central Bank of Kenya (CBK), remittances from the diaspora to the country rose to $ 1.75 billion in the first six months of 2021. That number represents an increase of nearly 20% from $ 1.46 billion over the same period last year.
Inflows in 2021 will exceed 2020 total
At this growth rate, Kenya’s remittance inflows in 2021 appear to surpass the total of just over $ 3 billion in 2020. However, the data shows that monthly inflows have declined slightly from $ 315 million in the fifth month to nearly $ 306 million. This drop from the highest monthly total to date is the only time that diaspora inflows have declined in 2021.
Meanwhile, the latest data shows that North America has cemented its position as the primary source of remittances for the East African country. In the first month of 2020, the North American diaspora accounted for about 48% of total remittances, or about $ 125 million out of a total of $ 259 million.
The North American diaspora dominates the tributaries
However, in the record-breaking fifth month of 2021, North America’s share rose to around 60%. In the sixth month, North America’s share of total transfers even rose slightly to 61.9%. This increase is despite the fact that total inflows had decreased slightly that month.
The European market, which accounted for 17.8% of total transfers in the first month of 2020, also saw a slight increase to 21.7% in the fifth month. In contrast to North America, whose share of total remittances increased in the sixth month, however, Europe’s share fell to 20.5%.
As the official CBK data suggests, the Kenyan diaspora in North America and Europe is becoming a major source of foreign currency for the country. However, this diaspora contribution – which appears to rule out informal transfers – is likely to increase if authorities formally support transfers via crypto platforms.
What do you think of Kenya’s growing remittance flows from North America and Europe? Let us know what you think in the comments section below.
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