Kenya has launched a new strategic plan aimed at reducing the costs of remittances sent by its diaspora while boosting the volume of money sent back home. The three-year plan, unveiled in Nairobi on Monday, seeks to enhance the financial contributions of Kenyans abroad to the national economy.
Prime Cabinet Secretary Musalia Mudavadi, who also serves as the Cabinet Secretary for Foreign and Diaspora Affairs, highlighted the key role the Kenyan diaspora plays in driving the country’s economic growth. ‘Kenyans abroad make direct investments locally, provide social support, and create an enabling environment for Kenyan exports,’ Mudavadi stated at the launch event in Nairobi. He pointed out that their contributions are visible in sectors such as education, health, housing, agriculture, tourism, and trade.
Mudavadi stressed the importance of reducing the cost of remittances, in line with the United Nations Sustainable Development Goal 10(c), which aims to lower remittance fees to 3 percent of the transfer value. ‘Remittance costs remain high despite calls for reduction. To make remittances truly impactful, transaction costs must be reduced. I urge all stakeholders, locally and globally, to work together towards achieving the global target for remittance costs,’ he added.
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The Prime Cabinet Secretary noted that diaspora remittances have grown significantly, reaching $2.8bn between January and July 2024, compared to $2.4bn during the same period in 2023. The trend indicates a projected increase in total annual remittances, from $4.19bn in 2023 to $4.8bn in 2024—a 14.6 percent growth.
Mudavadi also set an ambitious target of achieving annual remittances of KSh1 trillion (around $7.72bn) by 2027, coinciding with the conclusion of the strategic plan. He underscored that the growth in remittances strengthens local investments, enhances Kenya’s balance of payments, and reduces the Kenyan shilling’s vulnerability to external pressures.
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In addition to improving remittance flows, Mudavadi urged the foreign ministry to take the lead in creating a framework to support the smooth return of diaspora members to Kenya, ensuring their reintegration into society and facilitating their contributions to national development.
This strategic plan aims to harness the economic power of the diaspora while ensuring their investments contribute meaningfully to Kenya’s growth and development.
