Remittances to Kenya surged in March, helped by the US stimulus checks
Remittances to Kenya surged in March as the global economy recovered and as the government announced new lockdown measures.
Kenya’s remittances rise
Remittances to Kenya surged by 22% to $290.8 million in March this year. This was a substantial increase from the $228 million the country received in March 2020 when the coronavirus illness became a global pandemic.
Most of these funds came from the United States. According to the Central Bank, remittances from the country accounted to 55.9% of all funds received in March. It was followed by the United Kingdom, Saudi Arabia, and Canada.
Remittances from the rest of Africa declined by 65.9% in the first quarter. Furthermore, most African countries are still seeing high coronavirus cases and high unemployment rate. Tanzania was the biggest source of foreign cash to Kenya from Africa. It beat South Africa, which sends a substantial amount of cash to Kenya.
In total, Kenya received remittances worth more than $829 million in the first quarter and more than $3 billion in 2020.
The strong growth from the United States is partly because of the stimulus funds provided by the government. The funds amounted to $1,400 per person earning less than $75,000 per year.
Remittances and the Kenyan shilling
The funds from abroad have helped support the Kenyan economy at a time when its suffering its worst downturn. Its lucrative tourism sector has been decimated as many foreigners stay at home.
Similarly, the horticulture sector has struggled from low demand from western countries like the Netherlands and the UK. This has left remittances to be the biggest source of foreign currency to the Kenyan economy. As such, the rising remittances helped to stabilize the Kenyan shillng, as shown above. In a statement, the Central Bank of Kenya said:
“Remittance inflows continue to provide a stable source of foreign exchange for Kenya and a key support for many households, totaling USD 3, 094 million in 2020.”