4 ways diaspora cash keeps Kenya’s economy afloat

Kenyans abroad sent home more than $340 million in August 2025, according to data from the Central Bank of Kenya (CBK).

The figures from the “Remittances by Source” report show that the United States remained the leading source of diaspora inflows, followed by the United Kingdom, Saudi Arabia, and Germany.

America Leads With $193 Million

Remittances from the American region amounted to $193.18 million, accounting for more than half of total inflows in August.

The U.S. alone contributed $179.15 million, followed by Canada ($10.12 million), while smaller contributions came from the Bahamas ($40,000) and other countries across the Americas ($3.86 million).

Europe Sent $58.69 Million

From Europe, total remittances reached $58.69 million in August 2025. The United Kingdom topped this category with $28.53 million, followed by Germany ($10.41 million), Switzerland ($3.28 million), the Netherlands ($1.85 million), Italy ($1.79 million), Sweden ($2.40 million), and France ($1.58 million).

Other European countries, including Norway, Belgium, and Austria, contributed smaller amounts, while unspecified European sources brought in about $4.76 million.

Gulf Region Contributed Over $27 Million

In the Middle East, the leading sources were Saudi Arabia ($16.56 million), Qatar ($7.04 million), and the United Arab Emirates ($4.15 million).

These three accounted for the largest share of remittances from the Gulf, where many Kenyans are employed in domestic, healthcare, and technical jobs.

How Kenya’s Economy Runs on Diaspora Dollars

Beyond the impressive numbers, these funds have become one of the most powerful forces shaping Kenya’s economy, influencing everything from household spending to the strength of the shilling.

1. Kenya’s Largest Source of Foreign Exchange

Over the past decade, diaspora remittances have overtaken tea, horticulture, and tourism as Kenya’s top source of foreign exchange.

In 2024, total inflows reached a record $4.28 billion, and this year’s figures are on track to surpass that. 

This steady stream of dollars helps the CBK build and maintain foreign reserves, making it easier for Kenya to pay for imports, debt, and stabilise the local currency.

When remittances rise, the shilling gains strength against major currencies, helping the country manage inflation and the cost of imported goods like fuel, medicine, and electronics. 

Conversely, when inflows slow down, the pressure on the exchange rate quickly intensifies.

2. A Cushion for Families Against Economic Hardship

For many Kenyan households, remittances are more than just numbers in a CBK report; they are a lifeline.

Money sent from abroad pays for school fees, rent, hospital bills, and daily expenses. 

According to CBK estimates, most of the remittances go directly to families. In rural counties, diaspora inflows often fund home construction, agribusiness ventures, and small retail operations, stimulating local economies that would otherwise struggle.

3. Boosting Investment and Real Estate

A growing share of diaspora funds is being channelled into property and business investments.

Banks and SACCOs have reported an increasing uptake of diaspora-targeted mortgages and investment accounts, enabling Kenyans abroad to purchase or develop homes remotely.

This has made remittances a key driver of real estate demand. Developers now actively market housing projects abroad, aware of the diaspora’s appetite for stable investment options back home.

4. Supporting Kenya’s Balance of Payments

Kenya spends more on imports than it earns from exports, leading to a persistent current account deficit. Remittances play a critical role in narrowing that gap.

Every dollar sent home contributes to the balance of payments, effectively reducing Kenya’s need to borrow from external sources to finance trade. This stability, in turn, improves investor confidence and supports macroeconomic planning.