The President of the African Development Bank (AfDB) Akinwumi Adesina recently tweeted that Africans in the diaspora are the continent’s largest financiers.
Remittances from the diaspora to Africa have steadily grown almost threefold from $37 billion (Sh4.4 trillion) in 2010 to $96 billion (Sh11.6 trillion) in 2021.
In comparison, he noted, the total official development assistance to Africa in 2021 stood at $35 billion (Sh4.2 trillion) or just about 36 per cent of remittances from the diaspora. Closer home, the Central Bank conducted Kenya’s first Diaspora Remittances Survey. Data from the survey showed inflows to Kenya have increased tenfold in the last 15 years, reaching an all-time record of $3.7 billion (Sh447 billion) in 2021.
This phenomenal growth points to the importance of remittances as a source of foreign exchange to the country, equivalent to more than three per cent of Kenya’s GDP.
While Kenyans are now sending much more money back home in value and usefulness, we need to interrogate why this is the case.
A significant portion of remittances is targeted to meet the specific household needs of the recipients – usually recurrent expenditures like school fees, rent and healthcare. The Fund for Agricultural Development (IFAD) 2021 global data on remittances shows diaspora remittances can make up as much as 60 per cent of a household’s total income for millions of families. However, with the right policies, Kenya is ripe to attract more diaspora involvement in order to grow the economy in the longer term with a clear diaspora engagement blueprint. The government has so far taken the right step by establishing the State Department for Diaspora Affairs.
Key to this will be the closing of the disconnect between Kenyan systems and the diaspora, who mostly rely on family and friends to get information on the happenings at home. Stakeholders, including the government and the private sector, need to invest in a strong communications strategy that proactively targets Kenyans in the diaspora with a consistent breakdown of the developments at home and the benefits of their involvement with tangible results.