Cash sent home by Kenyans abroad rose 39.54 percent in 12 months through October helped by increasing investment vehicles and a tax amnesty.
The inflows hit $2.61 billion (Sh267.75 billion) in the period compared with $1.87 billion (Sh191.88 billion) a year earlier, the Central Bank of Kenya (CBK) reported.
The steady rise in remittances, analysts said, is largely informed by a growth in investment products targeting the diaspora community and an extended tax pardon for Kenyans who repatriate wealth stashed in foreign countries.
Between January and October this year, the cash sent by Kenyans living and working in foreign countries amounted to $2.23 billion (Sh228.92 billion), a 42.48 per cent jump over $1.57 billion (Sh160.66 billion) in the same period in 2017.
The 10-month inflows surpassed the $1.95 billion (Sh199.50 billion) sent back home in the whole of 2017 by Sh29.42 billion, the CBK data based on transactions through official channels such as banks and cash transfer firms show.
“Inward remittance flows remained resilient and amounted to $219 million (Sh22.46 billion) in October 2018, which was 18 percent higher than in October 2017,” CBK said in its weekly bulletin.
“North America, Europe and the rest of the world accounted for 50 percent, 32 percent and 18 percent, respectively of the total remittance in October 2018.”
It is conservatively estimated that about three-quarters of Kenya’s diaspora remittances go to charities and family support obligations such as medical bills, food and school fees.
“Remittances have been a silver bullet for many African countries and now outpace FDI (foreign direct investments) (foreign) Aid and any other source of hard currency you care to mention,” said Aly-Khan Satchu, an investment analyst who runs advisory Rich Management.
“A 40 percent year-on-year expansion is startling and the number might have been flattered a little by the ‘(tax) amnesty’. Nevertheless, remittances remain a ‘sweet spot’ and it’s underpinning the shilling.”