The Star (Nairobi)

Kenya Sent Out Sh52 Billion to Neighbours in 2012 - Report

At least $613 million (Sh52.8 billion) was sent from Kenya to four neighbouring countries in intra-African remittances in 2012, according to data collated by US-based 'fact tank' Pew Research Center.

Uganda received the largest share of outflows from Kenya amounting to about $530 million (Sh44.2 billion). Sudan (including the South), Tanzania and Ethiopia received an estimated $57 million (Sh4.91 billion), $15 million (Sh1.29 billion) and $11 million (Sh947.8 million) respectively.

"$614 million in remittances were sent from Kenya to other countries in 2012," PewResearch states in its computation published last Thursday, tracking patterns of remittances flow.

Remittance is the money that migrants send back to families in their countries of origin. PewResearch used the World Bank's remittance data.

The 'fact tank' shows $118 million (Sh10.17 billion) was sent to Kenya from Tanzania, while $53 million (Sh4.57 billion) was received from Uganda in reciprocal flows in 2012. Ethiopia also sent $1 million (Sh86.16 million) to Kenya.

The data show Kenya received at least $1.23 billion (Sh106 billion) in total from other countries in 2012, with the UK, US, Tanzania, Canada and Uganda being the top five sources of incoming remittances. The five remitted $488 million, $315 million, $118 million, $87 million and $53 million respectively.

However, the figures are higher than those of Central Bank of Kenya, which show remittance inflows amounted to $1.17 billion in 2012. Latest CBK data shows inflows increased in 2013 to $1.29 billion.

"Total remittances recorded in 2013 (were) 10.3 per cent higher than (those) recorded in 2012," CBK said, adding that average monthly inflows increased in the year, "reflecting resilience".

Kenya is among the five largest recipients of remittance flows in sub-Saharan Africa according to World Bank data for 2012, coming third after Nigeria and Senegal, and followed by Sudan (including South Sudan), South Africa and Uganda.

In a 'Migration and Remittances Brief' paper published April 2013, the World Bank said "positive prospects" for Nigeria, Kenya and top recipients in sub-Saharan Africa will significantly increase flows into the region.

The bank however warned that 'lifting fees' imposed by banks in SSA on incoming transfers recently was an "unwelcome development". The fee is paid by recipients, in addition to other charges already paid by senders.

"For example, including the lifting fee, the total cost of a remittance of $200 to Kenya can be 16 per cent, twice as high as the average sending cost. The lifting fee is yet another example of the lack of transparency in pricing that pervades the remittance industry," it said.

The World Bank said there is need for more transparency to strengthen consumer rights on remittances. "The persistence of high costs is inconsistent with the recent advances in technology and falling information costs," it said.

Lifting fee varies depending on the type of money transfer and payout. It costs senders in the US at least 0.3 per cent of the money being remitted to Kenya which includes the service charge (including postage fee) and commissions.

The CBK says that due to the huge sums involved, remittances are now recognised as an important contributor to the country's economic growth. In one way, increased remittances have helped stabilise or reduce the current account deficit.

The current account - sum of the balance of trade (exports of goods and services less imports), net income from abroad and net current transfers - is an important indicator of an economy's health.

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