Remittances by Kenyans in the diaspora are set to take a nosedive in light of massive layoffs and economic shocks caused by coronavirus pandemic.
Already, this year has seen a relative drop on inflows from the diaspora with February registering Ksh23 billion ($218.9 million) which was a decline from Sh26 billion sent back home in January.
For March, the figures could be lower especially with the shilling weakening against the dollar to hit Sh106.
In a report by the Associated Press, a total of 16.8 million Americans were rendered jobless in three weeks after COVID-19 went full-blown. The ripple effect of this is a sluggish economy which has affected the monies being sent to Kenya by Kenyans in the diaspora.
African Development Bank deputy director-general for East Africa Nnenna Nwabufo told Business Daily in an interview that the remittances will not be coming anytime soon as the economy is on its knees.
“Those remittances are not going to be coming,” she stated.
She added: “Most of the people filing for unemployment are mostly immigrants. While we have immigrants working in medical services but many others are in informal sector where they own restaurants and businesses.”
In 2019, total remittances from the diaspora hit Sh280 billion. About 90,000 Kenyans live in the US going by a Washington-based Pew Research Centre report.
Inflows from the diaspora are one of the key components that help the shilling stabilize against the dollar. However, now that exports are low due to COVID-19 pandemic and the remittances have dropped too, the shilling could continue to weaken against the dollar.