Migrants Still Contributing Highly To The FOREX Market In Kenya Despite Inflation
Globally, 78% of remittance senders agree that the cost of living has hit an all-time high. This has forced those who support families back home to change their spending habits. Most families say they eat out less, save on day-to-day expenses, limit social gatherings to save money, as well as opt for public transportation rather than driving themselves.
Remittance senders say that the costs of living for those they send money to have also gone up since the start of the year. The migrants however say that it is their financial obligation to family and loved ones back home, therefore maintaining support.
All this has been deduced from a survey by WorldRemit conducted in July to understand the impact of the global rise in the cost of living on remittances sent back home by migrants living and working in the US, the UK, and Australia. According to migrants, Daily expenses, healthcare, and educational support continue to be major reasons for sending money back home.
“Migrants’ resilience and commitment to their loved ones back home has proven to be vital, especially in a period where household expenses are increasing around the world,” said Jorge Godinez Reyes, Head of the Americas, WorldRemit. “This latest study proves that even during times of financial instability, many migrants are making conscious adjustments to their daily lives to maintain the regular flow of remittances to families and loved ones back home.”
The resilience of remittances is welcome news for Kenya considering money sent back home by Kenyans in the diaspora represents one of the top sources of forex for the country, surpassing tourism, tea, and horticultural exports in recent years.
Data from the Central Bank of Kenya (CBK) shows that remittances reached USD 3.71 billion (Sh421.98 billion) in 2021, up 20.2 percent from USD 3.09 billion (sh351.46 billion) a year earlier. Remittances in Kenya have hit a record high every year since 2016.
WorldRemit notes that the continued shift to digital remittance technologies has made it more convenient and affordable for those in the diaspora to send money back home. The London-based digital remittances firm also noted that Kenya is among the top 3 countries in Africa to which WorldRemit users globally send money. The company processed transactions to Kenya worth 170 million GBP (approx. Sh24.47 billion) as of June 1st, 2022. This figure puts Kenya at par with Zimbabwe and second only to Nigeria, where WorldRemit users globally sent 270 million GBP (approx. Sh38.86 billion).
WorldRemit, which serves more than 5 million customers across 130 countries worldwide, including Kenya, received responses from 1000 migrants in each of the countries surveyed, bringing the total number of respondents to 3000.