Kenya has solidified its position as the top recipient of diaspora remittances in East Africa, attracting an impressive $4.8 billion (Sh537.6 billion) in 2024, according to the latest World Bank data.
In the first five months of the year, Kenyans living and working abroad sent home $2 billion (Sh258.9 billion), marking an 18.9 percent jump from the inflows recorded during a similar period last year on the back of easing inflationary pressures in developed economies. The US remained the largest source of remittances to Kenya, accounting for 48 percent in May 2024.
The total figure of remittances Kenya received for the year 2024, far exceeded the inflows of its regional counterparts, with Somalia receiving $1.73 billion (Sh223.8 billion) and Uganda $1.49 billion (Sh192.5 billion). Other nations in the region, including the Democratic Republic of Congo (DRC) and South Sudan, recorded declines compared to previous years, with DRC’s remittances falling to $1.35 billion (Sh174.7 billion) and South Sudan’s to $1.14 billion (Sh147.4 billion).
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Tanzania, Rwanda, and Burundi remain below the $1 billion (Sh129.25 billion) threshold in remittance receipts, highlighting disparities in regional inflows. The World Bank report underscores the growing importance of remittances in global financial flows, noting that they have overtaken Foreign Direct Investments (FDIs) in low- and middle-income countries over the past decade.
In East Africa, South Sudan and Somalia are particularly reliant on remittances, with these transfers contributing 17.5% and 13.6% of their respective GDPs in 2024. Kenya, while less dependent, has seen its remittance-to-GDP ratio rise to 4.6%, up from just $51 million (Sh6.6 billion) in 2001. Rwanda’s ratio increased to 3.9% as inflows grew from $518 million (Sh67.0 billion) in 2023 to $537 million (Sh69.4 billion) in 2024.
Uganda’s ratio stands at 2.6%, while Tanzania, DRC, and Burundi report ratios below 2%. Regional Disparities in Remittance Contributions Tanzania’s remittance inflows remain the lowest in the region, at $757 million (5h97.8 billion), contributing just 1% to its GDP in 2024. DRC’s remittance-to-GDP ratio dropped to 1.8%, reflecting a sharp decline from record levels of $3.26 billion (Sh421.6 billion) in 2022. Burundi has consistently received under $50 million (Sh6.5 billion) annually since 2018, contributing just 1.6% to its GDP.
On the African continent, Egypt leads with $22.65 billion in remittances, followed by Nigeria at $19.84 billion and Morocco at $12.05 billion. East African country, Uganda, has maintained a steady stream of remittance inflows, growing from $238 million (Sh30.8 billion) in 2000 to $1,49 billion (Sh192.5 billion) in 2024. In contrast, Tanzania has faced slower growth, partly due to its reluctance to allow dual citizenship.
The growth of diaspora remittances across Africa, with Kenya leading the way in East Africa at $4.8 billion in 2024, carries profound implications for the continent’s economic development and resilience. Remittances have become a cornerstone of financial inflows to African nations, Surpassing Foreign Direct Investments (FDIs) in low- and middle-income countries. This shift underscores the increasing importance of diaspora contributions as a reliable source of funding for households, businesses, and national economies.
For Africa, remittances represent a lifeline for millions, providing essential support for education, healthcare, and daily living expenses. These funds often serve as a cushion against economic shocks, reducing poverty and inequality while boosting household purchasing power. They also contribute significantly to foreign exchange reserves, helping stabilize local currencies and enabling countries to manage trade deficits more effectively.
Overall, the prominence of remittances reflects Africa’s increasing integration into the global economy and the critical role of its diaspora in fostering economic growth. By implementing supportive policies and enhancing financial infrastructure, African nations can unlock the full potential of remittances to drive sustainable development, reduce poverty, and solidify economic resilience.