Kenya is embarking on an ambitious mission to achieve Sh1 trillion in annual
remittances from its diaspora by 2027. The State Department for Diaspora Affairs (SDDA) is leading the charge by initiating a survey to inform strategic planning aimed at bolstering remittance inflows.
Despite a steady increase in remittances over the past five years, reaching an average of $3.56 billion annually, the target of Sh1 trillion necessitates a substantial growth of approximately 36 percent over the next four years.
While the United States has traditionally been the main source of remittances, concerns have arisen over a slight slowdown in growth due to rising living costs and inflation. However, Central Bank of Kenya (CBK) Governor Kamau Thugge remains optimistic, highlighting the resilience of remittances from the US driven by a strong economy and job market.
Additionally, there has been a notable shift in remittance patterns, with Saudi Arabia surpassing the UK as the second-largest contributor. In response, the Kenyan government plans to implement targeted incentives to further stimulate remittance flows, strengthening foreign exchange reserves and promoting sustainable economic growth.
Kenya’s proactive approach underscores its commitment to leveraging remittances as a catalyst for economic prosperity, as it seeks to unlock new avenues of growth and resilience in the years ahead.
By: Montel Kamau
Serrari Financial Analyst
13th February, 2024
