Overall growth in the amount of cash sent home by Kenyans living and working abroad stalled in the nine months to September 2026, hit by a double-digit decline in inflows from the United States, which nearly wiped out all the gains recorded in other regions.<\/p>\n
Central Bank of Kenya (CBK) data show that remittances totalled $3.769 billion (Sh489.22 billion) in the January-September 2026 period, marginally below the $3.774 billion (Sh489.87 billion) received during the same period last year.<\/p>\n
The 0.14 percent decline reverses a 3.7 percent growth recorded in the nine months to September 2025, and the 17.14 percent expansion posted in the corresponding period of 2024.<\/p>\n
Kenyans in North America, the majority of whom are in the US, which is Kenya\u2019s largest source of diaspora cash, cut money wired back home by 11.19 percent to $1.946 billion (Sh252.59 billion) from $2.191 billion (Sh284.39 billion), the data show.<\/p>\n
This represents a loss of $245.2 million (Sh31.83 billion) in the review period.<\/p>\n
The contraction in the diaspora flows coincides with the introduction of a one percent US tax on certain money transfers abroad from January 1, as well as rising living costs that have squeezed disposable incomes among Kenyans working in America.<\/p>\n
Although the CBK\u2019s report on Friday showed regional data trends and did not isolate the United States, inflows from North America are predominantly US-sourced, making the region\u2019s decline the biggest drag on Kenya\u2019s diaspora remittance performance.<\/p>\n
The shortfall was largely offset by stronger inflows from Europe and the rest of Africa, which rose by 16.87 percent and 13.86 percent, respectively, in the review nine-month period.<\/p>\n
Remittances from Europe increased to $798.4 million (Sh103.63 billion) from $683.1 million (Sh88.66 billion), while inflows from the rest of the World rose to $1.025 billion (Sh133.05 billion) from $899.8 million (Sh116.79 billion).<\/p>\n
Europe and the rest of the world combined generated an additional $240.5 million (Sh31.22 billion), almost compensating for North America\u2019s $245.2 million (Sh31.83 billion) decline and leaving total remittances lower by $5.2 million (Sh674.96 million).<\/p>\n
The CBK number, which covers flows through formal channels, highlights the growing importance of diversifying sources of diaspora income for Kenya at a time when weakness in the US and Saudi Arabia is threatening to undermine overall growth in the foreign exchange inflows supporting Kenya\u2019s economy.<\/p>\n
CBK Governor Kamau Thugge had flagged the US slowdown, alongside weaker inflows from Saudi Arabia, in a presentation following the Monetary Policy Committee meeting on October 8.<\/p>\n
\u201cRemittance inflows remained resilient in the 12 months to August 2026, supported by diversified source countries and the impact of government policies to export skilled labor,\u201d Dr Thugge said.<\/p>\n
\u201cNevertheless, the remittance inflows slowed down, mainly reflecting reduced inflows from the USA and Saudi Arabia.\u201d<\/p>\n
The CBK governor said the recent recovery had prompted the financial services sector regulator to adopt a cautious outlook, with remittances projected to grow by a marginal 0.7 percent this year, followed by three percent in 2027.<\/p>\n
\u201cIn the last two months, we have seen some recovery in remittances, and indeed for January-August 2026, the decline in remittances was -0.7 percent,\u201d he said.<\/p>\n
\u201cLargely what has slowed down the remittances has been the reduced inflows from the US as well as Saudi Arabia.\u201d<\/p>\n
The latest nine-month figures suggest the recovery remains fragile, with cumulative inflows still slightly below last year\u2019s level despite stronger contributions from Europe and other countries across the world, including Asia and Africa.<\/p>\n
The slowdown threatens a vital source of money used to pay school fees, meet medical bills, finance housing and support daily spending for Kenyan households. Weaker inflows could also reduce the foreign currency entering the economy, pressuring the shilling against the US dollar.<\/p>\n
The pressure on Kenyan migrants in the US comes as higher living expenses compete with the money they would otherwise send to family and relatives back home.<\/p>\n
US inflation rose from 2.4 percent in February to 4.2 percent in May before easing, then increased again to 3.7 percent in September, according to official data.<\/p>\n
The transfer tax has added another potential cost for migrants supporting households at home, although the available remittance data do not establish how much of the decline is attributable to the levy.<\/p>\n
The slowdown has also coincided with economic uncertainty stemming from the Iran war, which disrupted global supply chains and raised transportation costs, adding pressure to prices and economic growth.<\/p>\n
\u201cThe conflict in the Middle East has disrupted global supply chains and led to a sharp increase in prices and transportation costs, resulting in higher inflation and moderated global growth,\u201d the CBK\u2019s Monetary Policy Committee said in June.<\/p>\n
Dr Thugge had also warned that the conflict was directly affecting remittances from the Gulf region, which account for about 10 percent of total inflows.<\/p>\n
Saudi Arabia also introduced labour-market reforms intended to increase employment among its citizens, tightening conditions for foreign workers, including Kenyans employed in domestic work, cleaning, driving and other basic occupations.<\/p>\n