Ruto bets on diaspora dollars to fix jobs gap, ailing economy

President William Ruto speaks after commissioning a Special Economic Zone sub-station in Naivasha on January 13, 2024. [Kipsang Joseph, Standard]

President William Ruto is making a bold bet on the potential of the Kenyan diaspora to create jobs and boost the country's economy. 

For a long time now, Kenyans have been moving out of the country in droves in a never-ending search for "greener pastures" - with employment and education emerging among the biggest factors pushing Kenyans abroad. 

The closest indicator of a growing Kenyan diaspora population is the significant rise in remittance inflows into the country that now closely rival earnings from major exports like coffee, tea and horticulture. 

The Kenyan diaspora is estimated to be over four-million-strong, scattered across the globe.

They send billions of dollars back home in remittances each year, which plays a vital role in supporting families and communities. 

Data from the Central Bank of Kenya (CBK) shows diaspora remittances rose by 8.34 per cent to $4.027 billion (Sh624 billion) in 2022, closing in on exports, which brought in $5.77 billion (Sh900.1 billion) worth of foreign currency in a similar period. 

The significant growth in diaspora remittances reflects a spirited fight by Kenyans abroad to better their future in the face of persistent criticism of poor diaspora policies. 

And now President William Ruto’s administration appears keen to capitalise on fixing the obstacles standing in the way of migrant hopefuls as it broadens its priority list for overseas jobs, especially for the youth as part of fulfilling its campaign pledges. 

Already nearly 400,000 professional career opportunities abroad have been created, according to government officials.  

The latest available slots in the planned "economic airlift programme" include 2,500 nursing and healthcare positions in Saudi Arabia that State House says are now open for qualified Kenyans. 

According to State House spokesman Hussein Mohammed, President Ruto continues to engage with international partners and negotiating frameworks to connect Kenyans with employment opportunities. 

Mr Mohammed said more opportunities are also on the horizon after the conclusion of bilateral labour agreements with Germany (250,000 jobs), Israel (30,000 jobs in agriculture), with 3,000 available by March this year, Serbia (20,000 jobs in construction and services) and Russia (10,000 jobs). 

"The President is committed to promoting Kenya as an investment, manufacturing, trade, and tourism destination, positioning it as a competitive source of professional, skilled, and semi-skilled labour," Mr Mohammed posted on X, formerly Twitter, on January 9. 

Equity Group's Chief Executive James Mwangi believes that if executed effectively, the proposed "Ruto airlifts" could have a similar transformative impact on Kenya as the renowned "Airlifts" programme did during the early 1960s, contributing to the country's post-independence economy. 

"If implemented correctly, they have the potential to transform the country's economy, grow remittances and incomes for thousands of Kenyans," Mr Mwangi told Financial Standard in a recent interview. 

The famous education Airlifts were a series of initiatives that took hundreds of Kenyan students to the United States and Canada for university education.  

Tom Mboya, who recognised the need for a well-educated workforce to build a strong independent Kenya, spearheaded these efforts. 

He worked with American and Canadian institutions and individuals, including Senator John F Kennedy and Martin Luther King Jr, to secure scholarships and funding for the programme.  

If the Ruto labour export plan is successful, it could see Kenya join the likes of the Philippines, which have tapped similar plans to tackle the local unemployment menace. 

International migration and large remittance flows have been prominent features of the Philippines' economy for many decades.  

Labour migration is one of many strategies adopted by developing countries to achieve economic growth, but its success varies across countries.  

The Philippine labour diaspora is one of the largest in the world, with around 9.1 million people or 10 per cent of the population working overseas.  

The personal remittances sent by these migrant workers play a crucial role in the economic growth of the Philippines, which is why the Asian country has policies that encourage labour migration. 

Remittances of $36 billion (Sh4.4 trillion) in 2021 comprised more than nine per cent of the Philippines’ GDP, underscoring the enormous contribution this group makes to the homeland.

It is often argued that remittances have played a stabilising role, notably during the Asian crisis when remittance flows are thought to have supported household expenditure and offset the sharp reduction in capital inflows. 

Back to Kenya, a 2019 Labour Ministry estimate puts the level of unemployment at 7.4 per cent, with about 85 per cent of the unemployed below 35 years. 

Currently, about four million Kenyans work abroad mostly in Europe, the US, the Middle East, Asia, Latin America and the Caribbean, and Oceania and South Africa. Most of them are health workers. 

Labour Cabinet Secretary Florence Bore says the government's objective is to generate one million job opportunities abroad for Kenyans.  

This initiative aims not only to tackle the issue of unemployment but also to enhance diaspora remittances and foreign exchange earnings.

CS Bore believes that this strategy will contribute to the growth of the economy and bolster the value of the Kenya shilling, which has been facing significant depreciation against the US dollar. 

Last year witnessed a decline of more than 20 per cent in the value of the shilling against the dollar.  

According to Ms Bore, there are about 15 countries where Kenyans can secure jobs, which will be available through the National Employment Authority.  

However, while the Kenya Kwanza government's efforts may lessen the unemployment problem and earn the country much-needed foreign exchange, critics warn that the eventual brain drain could have huge consequences for the country. 

There is also a risk that the focus on the diaspora could come at the expense of domestic job creation efforts.

Critics argue that the government should be doing more to create jobs for Kenyans within the country, rather than relying on diaspora workers. 

The country also stands to lose tax revenue to other countries, meaning creating jobs in Kenya is more beneficial.

Migrant workers also often face issues related to their welfare and protection at their workplace. 

In developing countries such as Kenya, the gap left by departing professionals may be too big that not enough with similar skills can be found to replace them. 

A crisis is already being experienced in the health sector, forcing the government to come up with plans to develop a policy to ensure proper and coordinated migration of doctors from the Kenyan health sector. 

Amid the criticism, President Ruto has, however, defended the move to send Kenyan workers abroad. 

“The other day I heard the opposition leader complaining that Ruto has taken Kenyans outside to different countries to work. What did he want them to do here in Kenya? He has complained too soon. We had agreed that no one would choose work, hadn’t we?” he said in December.  

“And that is not the end, it is just the beginning. Kenyans will go out in the thousands to go and work in different countries. There are those who are going to Israel in the next two months, others are going to Germany and the US.”