Recent research reports have shed light into the lifestyle, income levels and aspirations of Kenyans working abroad, providing useful information that the government can utilise to develop strategies for tapping the billions of shillings sent home by the diaspora every year.
In a joint study done last year, the Central Bank of Kenya (CBK) and World Bank said Kenyans in the diaspora send up to $1.8 billion (Sh144 billion) every year to their relatives and friends back home.
Most of this money, the report said, is used to finance household consumption, education, health and investment in property and at the stock exchange.
Another government-commissioned report released early this month by the International Organisation of Migration (IOM) said Kenyans living abroad have lost billions of shillings in the past five years after collapse of their enterprises-owing to poor management and fraud by friends and relatives.
The IOM report, which focused mainly on Kenyans working in the UK, showed about 32 per cent of the migrants earn between 21,000 and 31,000 sterling pounds (Sh2.6 million to Sh3.8 million) every year, which is above the median annual income of a full-time employee in Britain.
A common finding from the different researches is that majority of Kenyans in the diaspora are holding relatively high income jobs, and are keen on investing a portion of their earnings back home. This in itself should be music to the government’s ears.
As the institution charged with the role of maintaining sufficient foreign currency to pay external debts and vital imports, CBK has over the years suggested ways of tapping into the diaspora remittances kitty.
Just before onset of the global financial crisis in 2008, CBK had floated the idea of setting up a disapora bond, to facilitate a secure, interest-earning investment for Kenyans based abroad.
The money would then be used to finance growth-spurring infrastructure projects such as roads, health facilities and schools.
This noble idea, however, seems to have fizzled out in the past two years.
In a recent presentation to the Ministry of Foreign Affairs, a local lobby organisation for the diaspora said one major setback that Kenyans sending money home encounter is the high transaction costs.
Local banks, they said, make huge profits by charging senders transaction fees and at the same time earning margins on the exchange rate.
CBK needs to re-activate its plans of drafting policies that encourage diaspora remittances.
In doing this, it can borrow from countries such as Mexico and the Philippines, which have even gone to the extent of opening remittance deposit centres in their embassies to cut transaction costs for their citizens.
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