Remittances to Kenya have transcended their role as mere financial inflows to become the bedrock of the nation’s economic stability.
Year after year, these diaspora transfers consistently outpace the foreign exchange earnings generated by the country’s most celebrated exports, including tea, coffee, and horticulture. However, in December 2025, inflows recorded a decrease compared to the same period in 2024.
According to data from the Central Bank of Kenya (CBK), December remittances stood at Sh56.25 billion ($435.50 million), a modest decrease from the Sh57.52 billion ($445.39 million) recorded in the same month of 2024.
Yet, for 2025 as a whole, remittances increased, with total inflows rising 1.9 percent to reach Sh650.94 billion ($5.04 billion), up from Sh639.31 billion ($4.95 billion) the previous year. Despite potential month-to-month fluctuations, the lifeline from Kenyans abroad continues to expand, cementing its role as the nation’s foremost source of foreign exchange.
This steady increase was powered overwhelmingly by North America, which contributed a formidable Sh377.13 billion ($2.92 billion), with the United States alone responsible for over half of all remittances. Europe followed as a significant source, adding Sh119.43 billion ($924.73 million) to the annual tally.
These funds continue to be the economic bedrock for countless households, directly financing healthcare, education, and daily sustenance. However, the ecosystem supporting these vital transfers, particularly from the dominant U.S. corridor, is on the cusp of change due to a new policy by President Trump.
The introduction of a new 1 percent federal excise tax on certain international money transfers under the U.S. One Big Beautiful Bill Act (OBBBA), effective January 2026, introduces a new variable.
It targets physical cash, check, or money order transfers while exempting those made digitally via bank accounts, debit cards, credit cards, or digital wallets such as Apple Pay or Google Pay.
This policy shift may influence both the volume and the methods used for future remittances, adding a layer of uncertainty to the coming year’s figures even as the last year showed growth.
Amid this, Kenya’s macroeconomic buffers show stability. Its foreign exchange reserves stood at Sh1.61 trillion ($12.48 billion) as of last week, providing a comfortable 5.4 months of import cover, a slight improvement from the Sh1.60 trillion ($12.39 billion) or 5.3 months recorded at the end of December 2025. This provides a crucial foundation.
Recognizing the transformative power of these funds beyond consumption, the government has unveiled the Kenya Diaspora Investment Strategy 2025 to 2030.
The framework seeks to bridge the gap, channeling a portion of this immense financial support from essential needs into direct, productive investment in the economy.
