Global Financial C and Remittances: The case of Kenya

Kenya - 30 November 2012

The global financial crisis of 2008-2009 had various channels of transmission to Kenya and one of them was through remittances. However, Data from the Central Bank of Kenya shows that remittances from the Diaspora only reduced for the first six months of 2009 after which they started rising though not at the same rate as before. After that remittances have taken an upward trend and they comprise a sizable proportion of Kenya’s GDP. Remittances have been shown to smoothen consumption (food) on the part of recipients. They also use the remittances to pay for health services, built new houses, improve old ones, buy livestock and buy other household assets. However, data shows that only a very small proportion of remittances in Kenya are used for improvement of land though Kenya is an agricultural country. With the looming debt crisis in the Euro zone, the future of remittances in Kenya looks bleak unless the crisis is sorted out fast.
 

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