The Kingdom of Saudi Arabia rapidly emerging as a major contributor, rivaling the long-standing position of the United Kingdom. This shift reflects changing global migration patterns and evolving economic ties, although both countries’ contributions pale in comparison to the dominant role played by the United States of America.
Recent data from the Central Bank of Kenya (CBK) paints a vivid picture of this changing dynamic. In July alone, remittances from the USA reached a staggering US$ 216.6 million, dwarfing the contributions from other countries. However, it’s the competition for second place that’s drawing attention. The United Kingdom, traditionally a strong source of remittances, contributed US$ 30.2 million in July. In contrast, Saudi Arabia’s contribution surged to US$ 37.4 million, outpacing the UK and signaling a new trend in Kenya’s remittance inflows.
This shift becomes even more apparent when examining the data from January to July of this year. The CBK reports that the UK managed to surpass Saudi Arabia only in the first two months of the year, after which Saudi Arabia consistently outperformed its European counterpart.
The rise of Saudi Arabia as a key remittance source is closely tied to the increasing number of Kenyans finding employment in the Gulf region. As of July, the Kenyan government reported that 310,266 Kenyans were working in Saudi Arabia, representing the largest proportion of Kenyan workers in the Gulf states. This significant workforce has become a major driver of remittances back to Kenya.
The changing pattern of remittances reflects a broader shift in migration trends that has been building over the past five years. To put this into perspective, in 2019, remittances from the United Kingdom totaled US$ 20.6 million, while Saudi Arabia contributed a mere US$ 3.3 million. The dramatic increase in remittances from Saudi Arabia underscores the rapid evolution of Kenya’s economic ties with the Gulf region.
Several factors have contributed to this shift. Tightening migration laws in European countries have made it increasingly challenging for Kenyans to move to these traditional destinations. Conversely, Gulf countries have become favored destinations due to their growing labor needs and relatively more accessible migration pathways.
The strengthening ties between Kenya and Saudi Arabia were further cemented in 2022 when the two countries held their first Joint Commission for Cooperation (JCC) in Riyadh. This meeting outlined key areas of cooperation, including labor and consular affairs, ICT, transport, and development, setting the stage for increased economic and diplomatic relations.
Despite these changes, the United States remains the undisputed leader in remittances to Kenya. The CBK’s weekly bulletin from August 16, 2024, highlighted that the US accounted for 52 percent of remittances in July 2024, underlining its continued importance to Kenya’s economy.
The overall trend in remittances remains positive for Kenya. In July 2024, remittance inflows totaled USD 414.3 million, marking a 9.6 percent increase from July 2023. Even more impressively, the cumulative inflows for the 12 months to July 2024 reached USD 4,572 million, a substantial 12.2 percent increase from the previous year.
However, this shift in migration patterns and remittance sources is not without its challenges. Concerns persist about the working conditions and welfare of Kenyans in the Gulf region. In a sobering presentation to the Senate, Prime Cabinet Secretary and Minister for Foreign Affairs Musalia Mudavadi revealed that there had been 316 recorded deaths of Kenyans in the Gulf, with more than half occurring in Saudi Arabia. These figures underscore the need for continued diplomatic efforts to ensure the safety and well-being of Kenyan workers abroad.
ALSO READ; https://financialday.co.ke/1746/diaspora-remittances-record-high-ksh422-billion-2021/
