Remittance flows to Kenya slightly increased by 3.9 percent to $345.5 million in November 2022 from $332.6 million in October 2022, the Central Bank of Central Bank (CBK) has said in a weekly report.
The latest figures mean that Kenyans have sent in more than $4 billion in the last 12 months, a 9.7% increase compared to $3.67 billion brought in between November 2020 and November 2021.
According to the bank, the cumulative inflows continue to support the current account and the foreign exchange market.
“The usable foreign exchange reserves remained adequate at $7,103 million (3.98 months of import cover) as at December 8 2022. This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover.
More to that, the Central Bank of Kenya is projecting strong inflows in December 2022, which it counts on to help bridge the current account deficit in the wake of a rising import bill, and stabilize the weak shilling. “November and December are normally a strong period on remittances,” said Central Bank of Kenya Governor, Patrick Njoroge.
The US remains the largest source of remittances into Kenya, accounting for 55.8% in November 2022.
According to the World Bank, for a second consecutive year, remittance flows to low and middle-income countries (excluding China) are expected to surpass the sum of foreign direct investment (FDI) and overseas development assistance (ODA).
The remittances have been a significant source of household income in major African economies such as Kenya and Nigeria in 2022 where they help reduce poverty, improve nutritional outcomes, and are linked to higher birth weight and school enrollment rates for children from low-income families.
Furthermore, remittances help recipient households build resilience, such as by financing better housing and coping with disaster-related losses.
However, the World Bank has blamed expensive transaction fees for cutting back on the value of remittances coming into the continent. Africans pay the most for sending remittances to their home countries, with the figure at 7.8% in Q4 2021, much higher than the global average figure of 6.0%.
According to the World Bank, if the cost of sending remittances could be reduced by 5 percentage points relative to the value sent, remittance recipients in developing countries would receive over $16 billion dollars more each year than they do now.
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