Inflows from Kenyan diaspora deserve greater attention

Maurice Matumo (left), Co-operative Bank of Kenya's director of retail and business banking, with the financial institution's partners in diaspora business at the launch of its Diaspora Centre at Co-operative House in Nairobi on April 14, 2016. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • Don’t the 10 million Filipino diaspora remit a hooping US$ 40 billion annually?

  • At a third the number, pro rata, the Kenyan diaspora should remit US$ 10-12 billion.

  • But we are not being that ambitious yet; we simply want a proof of concept.

One asks: “Can an election that structurally and deliberately disenfranchises 15 per cent of eligible voters be ‘free and fair’ under any circumstance?” Over the past two months, this question has elicited a resounding “NO” on diverse social media, except once. Even in the singular case, the answer was: “It depends… it can still be ‘free and fair’, but not credible”. Can an election which is not credible be free and fair?

It is believed there are 3 million Kenyan diaspora. No official census has ever been done. The figures are a mere guess; they could be less or more but it is strange they have remained stagnant over the past decade, despite births and more migration. There are about 15 million registered voters in Kenya. Most of the diaspora are of voting age, including those who go for studies. Clearly, the diaspora constitute 15 per cent of eligible voting population. They can determine the outcome of a national election, including presidential.

Apart from numerical strength, the diaspora contributes significantly in socio-economic ways. Reports indicate 3-6 per cent of the GDP; even on the lower scale, this is significant. Sadly, even in economics, little authoritative data exists. According to Central Bank of Kenya (CBK), last year, the diaspora remitted US$ 1.6 billion. CBK relies on formal channels, mainly banks. There are many informal channels to send money home, including cash, mobile money, barter, hawalas, etc. World Bank estimates that for every dollar, there is equal non-formal remittance. In fact, in 2012, it put remittances at US$ 2.6 billion. The past decade, remittances have steadily grown at 10 per cent yearly, perhaps the only sector that has witnessed the much revered two-digit growth. In 2014/15, it grew by 15 per cent from US$ 1.4 billion (CBK). On average, we can say the diaspora remit about US$ 2 billion (Sh200 billion) yearly! That’s about 10 per cent of the National Budget at KES 2 trillion! It certainly is not small.


Tourism is wrongly branded the highest foreign exchange earner. In a good year it fetches about US$ 700 million, only a third of remittances. Even tea that last year earned a commendable US$ 1.2 billion constitutes only half of what the diaspora bring. Yet we treat them as second rate citizens! Contrast remittances with the much revered foreign investments, which in 2012 stood at only US$ 200 million, 10 per cent or sadaka of remittances! This despite the great effort and incentives to attract FDI! On a positive note, in 2015 FDI spiked to US$500 million, perhaps due to one-time inflows into mega infrastructure projects being undertaken. But even that is still only a quarter of remittances. FDI is from all the imaginable major global conglomerates! The figures for development assistance aren’t any different.

We don’t mean to say tourism, tea, FDI, etc, are not important. Of course they are and every effort to up them should be made. What we are saying is that inflows from the diaspora deserve greater attention. They come without conditionalities. When the environment is stressed (e.g. through heightened insecurity), remittances actually go up: “instead of sending Sh80 for mama to buy a packet of unga, you send Sh120”! The Kenya Diaspora Alliance has made a formal offer: if government both at national and devolved levels and corporates collabrate with the diaspora, inflows could easily double to US$ 4-5 billion annually within 4-5 years. After all, don’t the 10 million Filipino diaspora remit a hooping US$ 40 billion annually? At a third the number, pro rata, the Kenyan diaspora should remit US$ 10-12 billion! But we are not being that ambitious yet; we simply want a proof of concept!

Dr Shem Ochuodho is the global chairman of Kenya Diaspora Alliance and Chris Njenga is the chairperson of Diaspora Vote Multi-Stakeholder Task Team.


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