Lean holidays for families as remittance falls

Woman stressed over the holiday season. [Courtesy/GettyImages]

Millions of Kenyan households are bracing for a strained festive season and a nervous start to the New Year after money sent home from relatives abroad fell sharply.

Analysts are linking the drop to a crackdown on migrants under US President Donald Trump.

Remittance inflows, a vital economic lifeline, dropped to $388.3 million in November 2025, down 8.3 per cent from $423.2 million in the same month last year, according to the latest weekly bulletin from the Central Bank of Kenya (CBK) published on Friday.

At the prevailing exchange rate of Sh128.94 per dollar, the November inflows amounted to approximately Sh50.1 billion, a significant decline from the Sh54.58 billion sent in the same month a year earlier, hitting hard families reliant on this support.

The United States is the single largest source of remittance inflows to Kenya, historically accounting for over half of the total diaspora transfers.

“The decline raises concerns for Kenya, which is heavily reliant on these inflows for household incomes and foreign exchange stability,” said Ian Njoroge, a Nairobi-based analyst.

The CBK underscored the importance of these flows. “Remittance inflows remain a key source of foreign exchange earnings and continue to support the balance of payments.”

The drop comes during the crucial Christmas holiday period when many families depend on extra support from the diaspora. 

It follows heightened US immigration enforcement and the recent passage of the “One Big Beautiful Bill Act,” which includes a one per cent tax on cash-based remittances sent from the United States—a key source of flows to Kenya. While 12-month cumulative inflows rose 3.6 per cent to $5.05 billion (Sh656 billion), the monthly decline signals potential trouble ahead, analysts say.

An estimated four million citizens abroad are a vital economic artery for Kenyan households. However, the new US policies are affecting their ability to send money home.

“Instead of cracking down on illegal immigration and cartel finances, this tax will increase global instability and the very incentives that drive emigration in the first place,” some economists argue. Beyond household budgets, sustained declines could pressure Kenya’s macroeconomic stability.

Remittances are a major source of dollar inflows, helping shore up foreign exchange reserves, which stood at $12.13 billion (Sh1.56 trillion), or 5.3 months of import cover, as of December 18.

The shilling has held stable at 128.94 per dollar, the CBK said.