Remittances by Kenyans living abroad grew 13 percent in April to Sh24.7 billion compared to the same month last year, helping keep the current account deficit below five percent.
Latest statistics from Central Bank of Kenya (CBK) show that the remittances have climbed back to the highest level since June 2018, when they stood at a record Sh26.9 billion.
The CBK said in its latest weekly bulletin that the US continues to provide the bulk of the remittances at 45.6 percent, reflecting the large Kenyan diaspora community residing there and the fact that it is the world’s largest economy.
“The 12-month cumulative inflows to April increased to $2.75 billion from $2.23 billion in April 2018, reflecting a 23 percent growth,” said CBK in the report.
“North America, Europe and the rest of the world accounted for 47 percent, 24 percent and 29 percent, respectively. Remittances from the US amounted to $111.97 million representing 45.6 percent of inflows in April 2019.”
The remittances are now Kenya’s largest source of foreign exchange inflows, surpassing more traditional sources such as tourism receipts, tea and horticulture exports.
The CBK said in its Monetary Policy Committee (MPC) release Monday that healthy inflows—with the other forex sources also performing well— have seen the current account deficit settle at 4.5 percent in the 12 months to April 2019, compared to 5.5 percent over the same period last year.
“This reflects resilient performance of exports particularly horticulture and coffee, strong diaspora remittances, and higher receipts from tourism and transport services. Additionally, growth in imports slowed mainly due to lower imports of food,” said the CBK.
The current account deficit means that outward dollar payments outweigh inflows from exports and other sources.