Cash sent home by Kenyans living abroad in the first 11 months of the year increased by the slowest rate in three years.
Latest data from Central Bank of Kenya (CBK) puts remittances for the period at $2.546 billion (Sh256.4 billion), a 3.8 per cent rise, in the period compared with $2.453 billion (Sh247 billion) last year.
Last year, the remittances had grown by 40.7 per cent from 2017 at the same period in the year.
North America accounted for the bulk of the remittances, contributing 47.84 per cent on to the 11-month total, followed by Europe at about 23.9 per cent while the rest of the world combined accounts for about 28.07 per cent.
The rapid growth last year had been driven partly by a tax amnesty for Kenyans repatriating assets stashed abroad. It was due to expire in June 2018, but was extended to June this year.
As a result, the remittances hit an all-time monthly high of $295.3 million (Sh29.7 billion) in June before moderating in subsequent months.
In November, diaspora Kenyans remitted $218.8 million (Sh22.03 billion), which was a 2.4 per cent decline compared with October, when they sent home $224.3 million (Sh22.6 billion).
It was also lower than the Sh22.2 billion they sent home in November last year.
The remittances though remain Kenya’s biggest source of foreign exchange, ahead of other traditional sources such a tourism, tea and horticulture exports.
These dollar inflows have helped prop up the shilling in the foreign exchange market, and also narrowing the current account to 4.1 per cent as at end of October from five per cent in December 2018.
This year, the country’s current account deficit has also contracted due to a fall in imports — which means that there were lower outflows in payments — largely due to lower SGR and industrial machinery imports.
CBK only measures the money remitted through formal channels that include commercial banks and other authorised international remittances service providers in Kenya.
Money remitted through informal channels is therefore not reflected in the official data, meaning that dollar inflows are likely to be slightly higher than reported.
In an earlier briefing, CBK Governor Patrick Njoroge attributed the increase in remittances in the past two years to improvement in the channels of sending money back home.
Local banks have entered partnerships with remittance service providers that are allowing them to handle larger volumes of inflows.