Diaspora remittances hit Sh9.2b in December

By John Oyuke

December witnessed a drastic increase in remittances, with Kenyans abroad sending home $105.7 million (Sh9.2b).

Central Bank (CBK) said remittances grew by 24.3 per cent during the month in review, compared to $85.2 million (Sh7.4b) in December 2011, an indication of resilience in remittance inflows to Kenya despite the weak global economy.

Remittances stood at $97.5 million (Sh8.48b) in November last year,  up from $91.6 (Sh7.97b) recorded in October. Due to the huge sums involved, remittances are now being recognized as an important contributor to the country’s growth and development.

Money sent back home by Kenyans living abroad is the fourth-largest source of foreign exchange in the economy after revenue from tea, horticulture and tourism.

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The hard currency sent home by Kenyans also offers much-needed support to the local currency against the dollar.

CBK said remittances from all source markets have grown substantially since the second half of last year, with inflows particularly from North America accounting for almost half of the total flows.

Climate centre

During the month in review, inflows from North America grew by 17 per cent and seven per cent to $52.1 million compared to $44.5 million and $49.6 million in October and November.

Remittance inflows from Europe accounted for 28 per cent of the total in December, increasing from $25.4 million and $25.2 million in October and November to $29.3 million.

Inflows from the rest of the world also increased by 11.5 per cent and 6.6 per cent in October and November, to $24.3 per cent in December, according to the banking sector regulator.

According to the World Bank’s Migration and Remittances Unit following a rebound in 2011, growth of remittance flows to developing countries is expected to continue at a rate of seven-eight per cent annually to reach $441 billion by next year.