Kenyan citizens living and working abroad sent home a record US$5.04 billion in remittances in 2025, underscoring the growing importance of diaspora inflows as the country’s leading source of foreign exchange and a key stabiliser of the local currency.
Fresh data released by the Central Bank of Kenya (CBK) showed that diaspora remittances reached US$5.037 billion last year, representing a 1.9 percent increase from the US$4.945 billion recorded in 2024. The inflows are equivalent to about 650 billion Kenyan shillings and mark the highest level of remittances ever recorded by the country.
Despite a slight slowdown toward the end of the year, the annual total highlights the resilience and reliability of remittances amid global economic uncertainty. CBK data showed that inflows dipped by 2.2 percent in December 2025 compared with the same month a year earlier, but this was not enough to offset gains recorded earlier in the year.
Remittances continued to outperform Kenya’s traditional foreign exchange earners, including tea, coffee and tourism, cementing their position as the single largest source of hard currency for the economy. Analysts say the steady flow of dollars has played a critical role in supporting macroeconomic stability at a time of elevated global interest rates and external financing pressures.
Economists point to the direct and indirect benefits of diaspora inflows. At the household level, remittances provide income support for millions of families, helping to finance basic needs such as education, healthcare and housing. In many cases, the funds are also used to support small businesses and real estate investments, contributing to domestic economic activity.
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Beyond household welfare, remittances have had a significant impact on Kenya’s macroeconomic health. By supplying a consistent stream of foreign currency, the inflows have helped boost the country’s foreign exchange reserves and ease pressure on the Kenyan shilling.
Speaking on the impact of remittances, economist Daniel Kathali said diaspora inflows have been instrumental in cushioning the economy against exchange-rate volatility. “The diaspora remittances have a big impact on the Kenyan economy,” he said. “One of the most obvious impacts is the direct and positive effect on the recipients, who use the money for investments or to meet family financial needs.”
Kathali added that the broader macroeconomic benefits are equally important. “By providing a steady stream of U.S. dollars, remittances have significantly boosted the country’s foreign exchange reserves, and as a result, this has helped shield the shilling from excessive volatility in the exchange markets,” he said.
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CBK figures show that Kenya’s foreign exchange reserves remain at comfortable levels. As of January 15, 2026, usable reserves stood at US$12.48 billion, equivalent to about 5.4 months of import cover. This is well above the statutory minimum of four months and provides the central bank with a buffer to manage external shocks.
The strength of remittance inflows has also supported monetary policy efforts by reducing reliance on external borrowing to finance balance-of-payments needs. With global financing conditions still tight, analysts say this has helped ease pressure on interest rates and public finances.
The United States remains the largest source of remittances to Kenya, accounting for more than half of total inflows, followed by Europe, the Middle East and other parts of Africa. Growth in overseas employment, particularly in healthcare, construction and services, has supported the steady rise in remittance volumes over recent years.
Looking ahead, analysts expect remittance inflows to remain strong in 2026, although growth may moderate depending on global economic conditions and labour market trends in key destination countries. Even so, policymakers say the continued strength of diaspora remittances will remain central to Kenya’s external stability and economic resilience.
As Kenya navigates fiscal pressures and external risks, the record remittance inflows highlight the critical role played by its diaspora in supporting both household livelihoods and the broader economy.
