DIASPORA INFLOWS HIT 40% GROWTH
Last year seemed to be a better year for diaspora remittance recording an approximate growth of 40% from last years’ remittances.
An estimated population of three million Kenyans living in diaspora contributed a total inflows of sh274.2 billion by the end of December last year. This was a positive improvement from last years; diaspora inflows of sh197.9 billion, a growth of 40 per cent.
From the statistics released by the Central Bank of Kenya on Friday, out of the diaspora inflows, 45 percent came from North America, 32 per cent from Europe and 23 per cent from the rest of the world. Kenyans in diaspora plays a vital role in maintaining the Dollar-Kenya Shilling stability and spurring investments in the country.
If the growth in diaspora inflows persists, soon it will level with the foreign earnings from exports that currently stands at sh494.9 billion in total. The Central Bank of Kenya majorly depend on the banks as platforms to send money home, where money is paid through the bank who then instructs an associate in the home country to pay the final recipient, which is the CBK.
The spike in the dollar inflows last year has been explained by the analysts to be as a result of the tax amnesty announced by the Finance Cabinet Secretary last year on money hoarded abroad by Kenyan residents.
The Central Bank of Kenya through the Patrick Njoroge (CBK Governor) has come out to refute the claims that the tax amnesty caused such unusual spike in dollar inflows. He states that the exponential growth of diaspora inflows has never been caused by the tax holidays.
Tax amnesty was introduced by finance act 2016 where the tax procedures act was amended to provide a tax holiday to those residents who declare taxable income earned outside Kenya for the year 2016.