Kenya third in Africa diaspora cash inflow - World Bank

 

Kenya ranks among the top receivers of diaspora remittances in Africa, a key source of foreign exchange reserves.

World Bank's latest Global Findex 2021 database report places Kenya at position three in terms of total population receiving or sending money from abroad at 53 per cent.

According to the report released on Wednesday, Ghana received the highest share at 77 percent followed by Gabon at 55 per cent.

It attributes this to the rise in worldwide account ownership currently at 76 per cent globally and 71 per cent in developing economies.

According to World Bank, account ownership around the world increased by 50 per cent in the 10 years spanning 2011 to 2021, from 51 per cent of adults to 76 per cent.

The expansion largely driven by the adoption of mobile money also saw the gender gap in account ownership across developing economies fall to six per cent from nine per cent where it hovered for many years.

Diaspora cash transfers  are an important part of the economy in many places around the world and in Kenya it is currently the highest source of foreign exchange elbowing out coffee and tea.

Latest Central Bank of Kenya data shows that diaspora remittances now leads as Kenya's top forex earner after agricultural exports and tourism revenues suffered the effects of Covid-19. 

The growth in diaspora remittances marginally increased the country's forex reserve which remained adequate at $7.953 million or 4.59 months of import cover as of July 14.

A recent survey by the bank indicates education and health remains the leading uses and purposes of sending money back home by Kenyans living abroad, with the US the main source market.

CBK’s data shows 20 per cent of diaspora remittance is received by mothers, compared to 10 per cent for fathers. 

Despite economies battling recession fears, remittances are expected to remain resilient.

The World Bank has projected that remittance flows to low- and middle-income countries will increase by 4.2 per cent this year to reach $630 billion (Sh74.2 trillion).

The projection is an increase from a previous $565 billion (Sh66.5 trillion) announced in the first quarter of this year.

This follows an almost record recovery of 8.6 percent in 2021, according to the World Bank’s latest migration and development brief, with Kenya being among the biggest recipients in Africa.

Kenya was among top remittance recipient in the first months of 2022 according to data from digital payments service World Remit.

The East African economic powerhouse emerged position two after Nigeria receiving £170 million (Sh24.4 billion) from its citizens abroad in the first half of the year.

Nigeria received £270 million (Sh38.8 billion ) via World Remit as of June 1.

According to the Global Findex report, the most common way of sending or receiving domestic remittances is through an account.    BY THE STAR