In the first ten months of 2020, the diaspora remittances have increased by Kshs 30 billion to $2.54 billion (Kshs 268.63 billion). In 2019, the total diaspora inflows were $2.34 billion (Kshs 238.66 billion).
According to the World Bank’s projections, there was an expected fall in inflows of about 23.1% due to harsh economic conditions. The World bank had based their production on expected salary cuts and job losses in regions such as the US, China, and Europe. However, the remittances have increased unexpectedly despite the Covid 19 pandemic economic crisis.
Inflows from the US and South Africa Kenyan community have accounted for the high percentage increase of 9%.
Notably, remittances by Kenyans staying in the diaspora is the largest source of foreign exchange.
Other primary sources of foreign exchange include revenues for exports and tourism. There has been a significant increase in exports too, in the nine months.
However, despite the increase in the inflows, there is a persistent decline in the foreign exchange reserves. Following the opening up of the economy, the demand for dollars increased due to increasing imports hence the drop in the country’s foreign exchange reserves.