Covid-19 Pushes Diaspora Remittances To High Levels But With No Great Impact To The Economy Of Kenya


People in the Diaspora have become source of income to many poor relatives who are barely surviving due to high level of unemployment and the COVID-19 lockdown that affected many families and businesses all over the World.

A close look at Kenya Diaspora remittances during the month of June, 2020, shows a tremendous increase in the same and it is expected that the trend will continue until the country fully goes back to normal.

YearMonthNorth AmericaEuropeRest of WorldTotal Remittances (USD ‘000)

The Financial Markets department at Central Bank, compiles analytical foreign exchange daily rates data for use by the general public. These rates, reflect the average buying and selling rates of the major participants in the foreign exchange market at the open of trade every day, thus providing a good indicator for any interested party on the value of the shilling on any particular day.

During the last three months, the Kenya shilling has lost tremendously dropped in value and the same can be attributed to the Pandemic as the exports, and imports, have drastically dropped. The country during this period of Pandemic can barely sustain normal balance of payments as expected and is entirely relying on donations. The other factors affecting the economy is the decline in tourism not to even mention the hospitality sector and agriculture that have been affected greatly.

21/07/2020KES / USHS34.426534.348134.5048
21/07/2020KES / RWF8.89598.86348.9285
21/07/2020CHINESE YUAN15.401915.382115.4217
21/07/2020STG POUND135.9012135.7612136.0412
21/07/2020S FRANC114.7344114.6037114.8652
21/07/2020US DOLLAR107.6209107.5212107.7206
21/07/2020AUSTRALIAN $75.313175.232675.3936
21/07/2020SAUDI RIYAL28.694728.666228.7232
20/07/2020KES / BIF17.929817.691818.1678
20/07/2020SINGAPORE DOLLAR77.262177.184677.3396
20/07/2020STG POUND134.5568134.4176134.6959
20/07/2020KES / USHS34.393634.315134.4722
20/07/2020KES / TSHS21.594921.528321.6616
20/07/2020KES / RWF8.91058.87698.9441
20/07/2020US DOLLAR107.4329107.3329107.5329
20/07/2020SAUDI RIYAL28.641128.613028.6693

It is now clear that remittances especially in our country Kenya and elsewhere, are now helping many poor countries to stabilize consumption temporary by the direct family support to those that are now hard hit by the pandemic. Remittances are now coming in handy and proving as an important resource that can enable households to level their expenditure over time. The same will sustain them temporary while waiting to resume their normal hustles and access to financial loans to fund businesses, when the country returns to normal. Remittances during the close down has somehow eased liquidity constraints in households but not necessarily bringing any tangible economic growth as all is now used for consumption only. Many Kenyans including those in Diaspora, due to limited resources, have somehow shelved individual development projects.

If the Government can revisit this issue of remittances and appreciate the fact that Diaspora come in handy at times of crisis like we are now having, then it must consider creating a Ministry of Diaspora Affairs which can regulate and direct the much flow of remittances to many important financial gains sectors.

It is that ministry that can involve the Diaspora, to diversify and direct their remittances to other sectors that can directly revamp the economy while at the same time, benefiting from the same as an investment path.

Apart from investing, Kenyans in the Diaspora have ample skills and knowledge that can also help the Kenya Government to fast track the fully unexplored tourism market, agriculture, education and renewable energy.

If those in the Diaspora can be fully utilized, they can help the Government through exported technology to create more decent jobs which can yield tremendous economic growth other than relying on their remittances for domestic consumption only.

A lot of sectors can be explored and if the Diaspora are fully engaged in investing in those sectors, then the remittances can have a great impact to the economy of Kenya.

We are therefore urging the Kenya Government, to borrow a leaf from countries like India and Israel who have fully involved their Diaspora through well established ministry of Diaspora affairs by making them economic development partners and the same has produced good results.

The Diaspora in those countries, have directly impacted economic growth of their country by creating employment and increasing production in sectors that directly boost the economy.

Therefore it’s the Government responsibility to act fast and if they don’t, Diaspora remittances will continue to be used for domestic consumption only and even if the same continue to increase, they will not in any way greatly and directly impact the economy of our country.

Arch Dr. Isaac Kinungi

Global President

Diaspora National assembly for 254


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