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Kshs 934 Billion Diaspora Remittances 2014 – 2018 Inflow to Production & Consumption

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Remittances 2014 - 2018 Remittances 2014 - 2018

Diaspora remittances continue to grow. In the 2014 – 2018 period, $9.34 billion about Kshs 934 billion was remitted to Kenya. The questions are: How much of the remittances flowed to consumption? How much flowed to production? Diaspora say that the largest percentage of the money flowed to consumption.

The consumption inflow is when remittances are sent to help loved ones with: hospital bills, school fees, rent and other personal needs. These remittances are also called the donation inflow. 

The amounts that flow into the production mainly be applied in investments in building or purchase of property and investments in shares of companies. This is called the investment inflow. 

Both the inflows contribute toward the expansion of Gross Domestic Product (GDP). However, Diaspora continue to state that if more of the remittances inflow into the economy based on investment rather than donation then the country GDP will grow faster. The main point of flowing money into the economy via production is to create more jobs. 

Kenya today loses millions of hours that if made productive could lead to Kenya gradually developing the needs of Kenya as population grows. If Diaspora remittances inflow is directed more toward the production then Diaspora will benefit their loved ones with their daily needs as well as make Kenya a better Country.  

The Kshs 934 billion remitted by Diaspora is about one and half times the total amount of share capital of all the 53 banks that was Kshs 655 billion per the 2017 Central Bank of Kenya annual banking report. This shows the Diaspora money can expand the banking sector that services the production systems. 

If the Kshs 934 billion had purchased infrastructure bonds and gone to pave roads at an average cost of Kshs 20 million production cost, a cost that was established by Dr. Alfred Mutua the Machakos Governor when he paved a 33 kilometer road; the Diaspora remittances would have paved 48,200 kilometers of streets and roads. More importantly millions of hours of the human resource would not be lost and dust in the environment would be lower.    

Diaspora University Town (DUT) development plan, set-up by the Diaspora, is a plan geared to inflow Diaspora remittances into Kenya into production systems. In the 2019 – 2023, Diaspora are on track to remit about Kshs 1.2 trillion. The more money of the remittances that enters Kenya production systems, the better Kenya will be. 

The Diaspora working on the (DUT) plan are happy that the plan has introduced a system that will enable Diaspora money resource partner with communities with land resource and human resource in growing Kenya GDP as well as advancing the quality of life for Kenyans.   

DUT
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