Diaspora remittances in the first quarter of the year rose by four per cent compared to a similar period in 2016, bucking a falling trend in other African economies.
Latest Central Bank of Kenya (CBK) data shows that the remittances in the first three months of the year totalled $432.6 million (Sh44.7 billion) compared to $415.6 million in quarter one of 2016 (Sh42.1 billion at the March 2016 exchange rate).
Last year, Kenyans abroad sent home a total of $1.72 billion (Sh178 billion), making the remittances the largest source of foreign exchange for the country ahead of tourism and horticulture.
“Remittances continue to do well and are now at just a little less than 2.5 per cent of our GDP. They have grown even as remittances to sub-Saharan Africa fell by six per cent in 2016,” said CBK governor Patrick Njoroge last week.
The year-on-year growth rate of first quarter remittances is, however, the slowest since 2013, when they grew by 2.9 per cent compared to 2012.
There were fears that remittances from abroad would take a hit following the election of Donald Trump as US President.
He promised a tough anti-immigrant stance in his campaigns.
His administration has, however, not carried out any mass deportations of foreigners living illegally in the US. Kenyans are estimated at 30,000.
North America is the primary source of Kenyan diaspora remittances, providing nearly half of all the money sent home from abroad.
The rising remittances have provided a useful source of foreign exchange for the country, helping raise reserves as well as keep the shilling stable.
“The country has ample buffers in forex reserves, which are at an all-time high levels, and the IMF precautionary facility, giving us room to manoeuvre in case of future shocks,” said Dr Njoroge.
The shilling has depreciated by 0.7 per cent since the beginning of the year, while the current account deficit, which stood at -5.2 per cent at the end of last year, is expected to remain below -6 per cent this year.
Kenya tops as a sub-Saharan diaspora remittance destination behind Nigeria and Senegal.