Monthly diaspora remittance inflows to Kenya increased to 25 billion shillings in December 2019 up from nearly Ksh22 billion in November.
The cumulative inflows from Kenyans living abroad in 2019 increased to Ksh282 billion, compared to Ksh272 billion shillings in 2018, reflecting a growth of 3.7 percent.
North America, Europe and the rest of the world accounted for 50 percent, 20 percent and 30 percent, respectively, of the total remittances in December.
According to Cytonn Investment’s 2020 economic outlook report, remittances will likely to drop this year.
“We still expect upward pressure on interest rates due to increased efforts by the Kenyan Government to meet its domestic borrowing target in order to plug in the fiscal deficit.”
This follows the expiry of the tax amnesty in June 2019 whose effects are expected to be felt this year.
By September 2019, the flow of money into the country from Kenyans living and working abroad dropped in July compared to June after the return of taxable money stashed outside the country.
The Central Bank of Kenya weekly bulletin showed diaspora remittance for July stood at $224 million (Sh23.07 billion) compared to $295 million (Sh30.3 billion) in June, signaling a 31.6 per cent drop.
The drop came barely a month after the country recorded an all- time high in the remittance inflows in June as people rushed to beat the tax amnesty deadline.
The government had in 2016 amended the Tax Procedures Act to introduce Section 37B which granted amnesty on foreign income that had been earned on or before December 31, 2016.