Dollar inflows from African countries into Kenya dropped 65.9 per cent in the first three months this year, with Tanzania overtaking South Africa as the biggest source of remittances.
New data by the Central Bank of Kenya (CBK) shows that Kenyans living across the continent sent home $39 million (Ksh4.2 billion) between January and March compared to $114.7 million (Ksh12.3 billion) in a similar period of 2020.
The sharp decline in inflows was driven by lower remittances from South Africa, which was the biggest source last year but has since slipped behind Tanzania and Uganda.
Dollar flows from the continent contrasted with the rest of the world led by the US, which saw a 17 per cent increase in total remittances from $707.1 million (Ksh76.3 billion) in the first quarter of last year to $829.4 million (Kshh89.5 billion) this year.
“The US remains the largest source of these inflows, accounting for 55.9 percent of remittances in March 2021. The other top source countries were: UK (11.2 percent), Saudi Arabia (4.0 percent), Canada (2.9 percent), and Australia (2.9 percent),” the CBK said in a press statement.
The negative impact of the coronavirus has been felt much more among developing countries compared to the developed nations where citizens and businesses have enjoyed bailouts and social support worth trillions of shillings after workers were either laid off or forced to stay indoors to contain Covid-19.
In Africa, most governments lacked adequate spending power amid falling tax revenues and huge debt payments, which left residents hit by the pandemic without any support.
As a result of job cuts, pay cuts and lockdown measures those living in other African countries were unable to send money home.
Many also opted to return home rather than get stranded abroad. Most countries, including Kenya, banned international flights, excluding cargo and repatriation of foreign nationals.
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