Kenya’s diaspora remittance boom is losing momentum in 2026, raising the possibility of the country’s first full-year decline in the flows since 2009. Inflows during the first seven months were reported at about Sh368.75 billion, around Sh9 billion below the comparable period a year earlier, despite a strong rebound in July.
The deterioration has forced the Central Bank of Kenya to lower expectations for the year after remittances had reached a record $5.04 billion in 2025. The latest figures show that July inflows rebounded to about $436.6 million from $375.6 million in June, but cumulative flows over the past 12 months remained below the corresponding 2025 level.
Key Overview
- Remittances totalled about Sh368.75 billion in the first seven months of 2026, around Sh9 billion lower than a year earlier.
- July inflows rose to $436.6 million, up 16.2% from $375.6 million in June.
- Twelve-month remittances to July fell 1.8% to about $4.99 billion from $5.08 billion a year earlier.
- CBK now expects only 0.7% full-year growth, a significant slowdown from earlier expectations.
- Saudi Arabian remittances have been under pressure following changes to expatriate work-permit classifications.
- A full-year contraction would be Kenya’s first since 2009, when inflows declined during the global financial crisis.
July Rebound Fails to Reverse the Broader Slowdown
Monthly remittances improved sharply in July after three consecutive monthly declines. Kenyans abroad sent approximately $436.6 million, compared with $375.6 million in June, representing a 16.2% month-on-month recovery.
However, the stronger July figure has not reversed the weaker annual trend. Cumulative remittances for the 12 months to July stood at approximately $4.987 billion, down from $5.080 billion during the corresponding period ending in July 2025.
The first half had already shown significant weakness. Inflows from January through June fell to about $2.44 billion, around 3% below the same period in 2025, following softer transfers from several important source markets.
The slowdown is especially notable because remittances have become one of Kenya’s most dependable sources of foreign currency, providing support to household consumption, investment and the balance of payments.
CBK Cuts Its Expectations for 2026
The weakening trend has prompted a more cautious outlook from monetary authorities. Governor Kamau Thugge said remittances had contracted by 2.4% in the 12 months to June 2026, adding that the central bank expects conditions to improve during the second half if geopolitical pressures in the Middle East ease.
CBK’s latest forecast points to annual remittance growth of only 0.7% in 2026, which would be the weakest expansion in many years. Earlier in the year, the institution had expected stronger growth after remittances reached a record $5.04 billion in 2025.
The 2025 total had represented growth of approximately 1.9% from $4.95 billion in 2024, already a major deceleration from the 18% expansion recorded the previous year.
If inflows fail to recover sufficiently during the remaining months of 2026 and finish below 2025’s level, it would mark the first annual decline since 2009, when transfers slipped to roughly $609 million from $611 million during the global financial crisis.
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Saudi Arabia Emerges as a Key Pressure Point
Changes in Saudi Arabia’s labour market have added pressure to an important remittance corridor for Kenya. Transfers from the kingdom had already weakened significantly in 2025, with annual inflows from Saudi Arabia falling about 25% to around $302 million.
Saudi authorities introduced a new system classifying expatriate work permits into high-skilled, skilled and basic categories. The classification framework assesses foreign workers according to factors including qualifications, professional experience, skills, wages and age.
The system was phased in during 2025 and has reshaped employment conditions for migrant workers. Kenyan remittance flows from Saudi Arabia subsequently dropped sharply during parts of the year, contributing to the broader slowdown.
Remittances Remain Critical to Kenya’s External Position
Despite slower growth, diaspora transfers continue to play an important role in Kenya’s economy. The country’s 2025 remittance survey highlights their importance in household welfare, savings, investment and national development.
North America remains the dominant regional source, accounting for 51.6% of July 2026 remittance inflows, meaning labour-market and economic developments in the United States continue to have an outsized influence on Kenya’s receipts.
The outlook for the rest of 2026 will therefore depend heavily on employment conditions in major diaspora destinations, geopolitical developments and the ability of workers abroad to maintain transfers despite rising living costs.
July’s rebound offers some evidence that the decline may stabilise, but Kenya would need stronger and sustained inflows through the remainder of the year to preserve its long-running record of annual remittance growth.
Sources: Central Bank of Kenya / State Department for Diaspora Affairs / Business Daily / Khusoko / Cytonn Report / Ministry of Human Resources and Social Development Saudi Arabia
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