Diaspora Remittances Top Ksh 650 Billion in 2025, Cementing Their Economic Role
By Chemtai Kirui
Nairobi, Jan. 20 — Money sent home by citizens living and working abroad reached a record KSh 650 billion roughly in 2025, according to the latest figures from the Central Bank of Kenya (CBK), reinforcing the growing influence of diaspora flows on the economy and foreign exchange stability.
The annual total, the highest ever recorded, continues a long-term trend in which remittances have become one of the most stable sources of foreign currency, rivalling traditional export earnings from tea, coffee and horticultural products. While the year-on-year increase of 1.9 percent appears modest compared with previous periods of double-digit growth, it showcases the resilience of diaspora inflows even amid global economic headwinds.
December alone saw transfers of about KSh 56.2 billion, slightly lower than the previous year, yet enough to push cumulative inflows beyond the KSh 645 billion mark for the first time.
North America remains the largest source of remittances, accounting for over half of total inflows, particularly from the United States, where many citizens work in healthcare, technology, transport, and domestic services. Europe and the Gulf Cooperation Council countries follow closely.
Data from the CBK show that most senders use formal channels such as banks and licensed money transfer operators, which ensures better recording and contributes to the rising official figures.
Though a full regional breakdown for 2025 is yet to be published, monthly trends indicate that inflows consistently hovered above KSh 51.6 billion, driven by family support, savings, and investment purposes.
Remittances play a critical role in supporting macroeconomic stability. They bolster foreign reserves, ease pressure on the shilling, and provide a buffer against external shocks.
As of mid-January 2026, usable foreign reserves stood at around KSh 1.61 trillion, covering approximately 5.4 months of imports, comfortably above the statutory minimum of four months.
Economists say that while growth has slowed compared with earlier periods, sustained inflows continue to support the current account and the domestic currency. A stronger shilling helps reduce the cost of imports, indirectly easing inflationary pressures on essential goods, including fuel.
For many families, these transfers are a lifeline. Funds are commonly used for essential expenses such as school fees, healthcare, housing, and day-to-day needs.
Surveys over the years show that a significant portion of diaspora money also feeds small businesses or savings accounts, underpinning local economic activity.
Remittances further deepen financial inclusion.
Recipient households increasingly rely on mobile money and banking platforms to receive, save, and spend funds. Improved digital channels and lower transfer costs have made sending money abroad faster and more affordable, particularly for younger diaspora communities.
Despite the record figures, economists caution that growth in 2025 was among the slowest in recent years, reflecting broader global economic trends, including weaker labor markets in key destination countries.
They say that heavy reliance on diaspora inflows presents both opportunities and vulnerabilities.
Policymakers and analysts have proposed measures to increase the developmental impact of remittances. Reducing transfer costs, encouraging diaspora investment in productive sectors, and issuing diaspora bonds to channel funds into infrastructure and enterprise development are among the suggested strategies.
These efforts aim to shift a portion of remittance flows from immediate consumption to long-term investment, expanding their role in economic growth and job creation.
With robust digital transfer systems and continued labor demand abroad, diaspora flows are expected to remain a key pillar of stability, supporting local economies, enhancing household welfare, and bolstering resilience in both urban and rural communities.
