Latest data from Kenya’s Central Bank (CBK) reveals that diaspora remittances hit Sh329.41 billion ($3.094 billion) in 2020 despite the impact of the COVID-19 (coronavirus) pandemic. Although the virus crippled its foreign earnings from tourism and exports due to a global lockdown, the East African nation earned a minimum of Sh6.33 billion weekly in diaspora remittance last year.
According to a report, the country experienced a growth of 10.7 percent in diaspora remittance from the Sh285.23 billion ($2.796 billion) it made in 2019. It is also important to note that the pandemic significantly encouraged the use of financial technologies which accounted for an increase in online transfers. These smart innovations helped Kenyan’s abroad to send money home with ease.
“This remarkable growth of remittances has been supported by financial innovations that provided Kenyans in the diaspora more convenient channels for their transactions,” Patrick Njoroge, CBK’s Governor said in a statement,
According to the apex bank, the strong performance came on the back of December 2020 remittances hitting Sh32.91 billion ($299 million). That was the all-time high to have ever been sent home in a single month.
The country currently tops in diaspora remittances in the Eastern African region. According to the report, the United Nations recommended that remittance costs should not exceed three percent of the value of money being sent home, but steady growth in remittance has defied that submission.
For over a decade, Kenya’s economy did not experience a severe contraction like it did in the second quarter of 2020. But the impact of the COVID-19 pandemic reversed the narrative after 12 years as it crippled key economic sectors like tourism and agriculture. According to a report, the country’s Gross domestic product (GDP) depreciated by 5.7 percent, compared with growth of 4.9 percent in the three months between March and June.