CBK Targets Billions Sent by Kenyans in the Diaspora
The Central Bank of Kenya is seeking to develop a policy framework that would allow Kenyans living and working abroad to venture into direct investments within the country.
A report by the Business Daily indicated that the framework would include incentives such as tax rebates which would lead to an increase in remittance inflows.
Diaspora remittances are funds sent by a person in a foreign land to their home country.
CBK Governor Patrick Njoroge hailed the incentive model and pointed out to countries such as India that emulate the said model.
He added that Kenyans abroad ought to be provided with opportunities to develop the country’s economy through investments.
“There are all sorts of ways that Kenyans out there could be supportive (to economic development), not just making investments in government securities and other assets like equities,” Njoroge stated.
His words were echoed by Kenya Diaspora Alliance (KDA) global chair Shem Ochuodho, who stated three-quarters of remittances mainly go into family support such as fees and medical bills.
He affirmed that the amount would be directed to investments if Kenyans in the diaspora are offered lucrative deals.
Initially, CBK conducted the Diaspora Remittances Survey between February and March 2021 in a bid to collect valuable information on remittance inflows to Kenya.
This, CBK claimed, would help guide the policy framework, with the objective of boosting the role of remittances in supporting the economy and livelihoods.
Among the vital information collected by CBK included the efficiency and cost of alternative remittance channels; the difficulties encountered in remitting cash or non – cash transfers; the availability of information to Kenyans in the diaspora about investment opportunities in Kenya; and the usage of remittances received.
Diaspora remittances have been recognised as an important contributor to the country’s growth and development.
CBK 2020 report showed that diaspora remittances rose to Ksh340 billion despite the effects of the Covid-19 pandemic. This was an increase of 10.7 percent from Ksh279 billion in 2019.