Kenya posted a 42 percent growth in the seven months to July as more Kenyans continue to seek jobs and study abroad, especially in the continent.
The Central Bank of Kenya (CBK) data reveals that in the seven months to July, Kenyan citizens living in other African countries wired $164.4 million (Ksh22.2 billion), up from $116 million (Ksh15.6 billion) last year.
The growth is the fastest among all continents in a period when North America and Europe are coming from high inflation that averaged eight percent in the US and 7.9 percent in the UK.
Most of the cash from those residing abroad is spent on consumption, with North America accounting for 60 percent.
The search for ‘greener pastures’ in terms of employment and education is the biggest factor pushing Kenyans to go try their luck abroad.
Uganda and Zambia are an example of countries offering better opportunities for Kenyans.
Inflows from Zambia more than doubled, growing 136 percent to $5 million, followed by Uganda, which posted a 113.5 percent growth in cash sent back home by Kenyans.
Inflation in the US has since eased to 3.2 percent in July. But with cumulative seven-month inflows, the world’s biggest economy still declined by 1.6 percent ($22 million) to $1.36 billion.
Remittances, which are the single-biggest source of forex inflows into Kenya, stood at $4.3 billion (Ksh483 billion last year), beating earnings from tourism (Ksh268 billion-$1.85 billion), tea (Ksh163 billion-$1.13 billion) and horticulture that brought in Ksh152.2 billion ($1.1 billion) last year.
High global inflation brought by geopolitical tensions led to the United States raising its interest rates, which resulted in contractionary global monetary policies and a preference for government securities as investment assets due to a reduction in inflows into Kenya.
On the flip side, inflows from Middle East countries posted a significant drop in the period, with Bahrain posting an 80 percent reduction from $5.6 million last year to $1.1 million this year.
Qatar posted a 38.4 percent fall to $31.9 million, while inflows from Oman declined to $1.1 million (68 percent).
South Africa also posted a significant drop halving to $6.3 million from $13.5 million in the January-July period last year.
Source: The EastAfrican