Kenya Marks International Day of Family Remittances 2025 with IFAD, Calling for Inclusive Financial Systems

(From left to right: Prof. Robert Mudida, Director of Research, Central Bank of Kenya; Mariatu Kamara, Country Director, IFAD Kenya; and Boniface Munzala, Director of Diaspora Affairs, Ministry of Foreign & Diaspora Affairs, at the National Stakeholder Remittance Network Conference held at Radisson Blu Arboretum, Nairobi.)

Kenya joined the global community in commemorating the International Day of Family Remittances (IDFR) 2025, under the theme “Family-Oriented Policies for Sustainable Development: Towards the Second World Summit for Social Development.” The celebration recognized the critical role that diaspora remittances play in supporting families, driving financial inclusion, and accelerating sustainable development in the Global South.

Roseline Njogu’s Remarks (via Video)

The keynote address was delivered virtually by Madam Roseline Njogu, Principal Secretary of the State Department for Diaspora Affairs. In her impassioned message, Njogu praised the resilience and dedication of millions of migrants who, despite facing cultural and economic challenges abroad, consistently send money home to support their families and communities.

Njogu highlighted that in Kenya, diaspora remittances have become the country’s top foreign exchange earner, overtaking traditional sectors like tea, coffee, and tourism. According to the Central Bank of Kenya, Kenyans abroad sent home $4.94 billion USD in 2024, marking an 18% increase from the previous year.

She emphasized the government’s commitment to:

• Creating affordable, safe, and transparent remittance channels

• Partnering with financial institutions and development agencies like IFAD

• Lowering remittance costs, expanding financial literacy, and empowering women

• Promoting gender-inclusive approaches and digital tools to ensure that women—often the primary recipients and decision-makers—maximize the developmental impact of remittances

She concluded by aligning Kenya’s commitment with the IDFR 2025 campaign and the upcoming Fourth International Conference on Financing for Development, calling on global partners to join in harnessing the full potential of diaspora contributions.

Remarks by Director Boniface Munzala

Representing the State Department in person, Director Boniface Munzala, Head of the Savings, Investment, and Remittances Division, echoed Njogu’s sentiments and underscored the significance of the day.

Munzala highlighted Kenya’s progress in transforming cross-border money transfers, driven by digital platforms and mobile money, which have increased accessibility and affordability. However, he cautioned that remittance costs still average 6%, double the SDG target of 3%.

He reaffirmed the government’s goals to:

• Formalize remittance channels and reduce transaction costs

• Strengthen digital financial infrastructure

• Implement diaspora-focused financial literacy programs

• Roll out a forthcoming Diaspora Investment Strategy to diversify investment opportunities for Kenyans abroad

He concluded with a call to action for financial institutions, private sector actors, and development partners to collaborate more intentionally in leveraging remittances as a transformative force.

Key Takeaways

• $4.94B USD was remitted to Kenya in 2024, the country’s highest-ever total.

• The government is developing a Diaspora Investment Strategy and expanding digital financial services.

• Women play a central role in the remittance ecosystem and are a key target group for financial inclusion.

• Reducing costs, boosting financial literacy, and enhancing access in rural areas remain top priorities.

• Kenya reaffirmed its commitment to the global IDFR 2025 campaign and broader SDG-aligned financial inclusion goals.

“Remittances Are Kenya’s Bright Spot in a Stormy Global Economy,” Says CBK’s Prof. Robert Mudida

Professor Robert Mudida, Director of Research at the Central Bank of Kenya (CBK), delivered a wide-ranging, deeply insightful message on the transformative role of remittances in Kenya’s economic resilience, global shocks notwithstanding.

Addressing a gathering of dignitaries, development partners, government officials, and diaspora stakeholders, Prof. Mudida painted a clear picture of the world’s fragile economic state while celebrating remittances as an anchor of hope and stability.

He traced the succession of global shocks: the COVID-19 pandemic, the prolonged Russia-Ukraine conflict, and ongoing Middle Eastern tensions, particularly the escalating Israel-Palestine conflict, which is increasingly being seen as a regional issue. These have all led to widespread geopolitical instability.

Uncertain Growth, Downgraded Forecasts

According to Prof. Mudida, the compounded effect of these crises has caused international financial institutions—including the IMF, OECD, and the World Bank—to lower global growth forecasts for 2024 and 2025. The IMF’s World Economic Outlook projects a 2.8% global growth this year, while the OECD forecasts 2.9%. The World Bank’s latest revision, issued just days before the event, further confirmed this outlook.

Yet, amid this volatile economic environment, one element has proven astonishingly stable: remittances.

Remittances Defy Global Turmoil

Against the backdrop of slumping exports and dwindling foreign direct investment (FDI), Prof. Mudida described remittances as a standout beacon of resilience.

According to the World Bank’s Migration and Development Brief (December 2024), remittances to low- and middle-income countries (LMICs) reached USD 669 billion in 2023, exceeding both FDI and official development assistance (ODA). Remarkably, remittances are projected to grow faster than global GDP, even amid economic uncertainty.

Kenya’s Record-Breaking Figures

In the Kenyan context, remittances hit a record high of USD 4.9 billion in 2023, a figure that Prof. Mudida celebrated as both economically vital and symbolically powerful.

To put this in perspective, Kenya’s total goods exports stood at around USD 13 billion, while services exports brought in approximately USD 8 billion. That means remittances now amount to nearly half of the value of Kenya’s total goods exports—a remarkable statistic by any standard.

Furthermore, remittances now contribute an estimated 4.1% of Kenya’s GDP, compared to FDI inflows, which hover around 1%. For Prof. Mudida, this comparison underscores just how critical remittances are in shaping Kenya’s macroeconomic health.

The U.S. and Emerging Remittance Corridors

The United States remains the top source of remittances to Kenya, contributing about 55% of total inflows. However, Prof. Mudida noted the rise of new remittance corridors—particularly Saudi Arabia and the Middle East, which have grown substantially in recent years due to increased Kenyan labor migration.

He also acknowledged growing inflows from countries such as Australia and Southern African nations, pointing to a diversification of sources that bodes well for long-term resilience.

Beyond Money: A Call for Brain Circulation

In a powerful pivot, Prof. Mudida urged stakeholders to go beyond financial remittances and embrace the full transformational power of diaspora engagement—including intellectual, cultural, and social capital.

He highlighted how many countries benefit from returning diaspora professionals who bring international exposure and experience to help shape national policies and innovation agendas. “They can transform institutions based on decades of hands-on global experience,” he added.

Further, diaspora cultural exposure can spur innovation, by merging home and host country norms, values, and ideas. This cross-cultural fluency is especially critical for developing countries seeking to unlock new thinking in entrepreneurship, education, governance, and health.

Strengthening Ties and Financial Infrastructure

Prof. Mudida also emphasized the social value of remittances in forging lasting ties between diaspora communities and their home country. The sense of connection—expressed through financial support, visits, and cultural exchanges—helps maintain a national identity while building transnational networks.

On the financial front, the CBK has launched several initiatives to make remittance investment easier and more impactful. One key measure is the implementation of the Central Securities Depository (CSD)—popularly known as Dhow CSD, named after the traditional Swahili sailing vessel.

The Dhow CSD aligns with the broader vision of unlocking diaspora-driven development through structured investment opportunities and inclusive financial systems.

Conclusion: From Transactions to Transformation

As he concluded, Prof. Mudida reiterated that the focus must now shift from merely recognizing remittances as financial flows to understanding them as development levers. He welcomed the 2025 campaign theme, which emphasizes maximizing the development impact of remittances.

In these turbulent times, remittances have proven to be more than just lifelines—they are catalysts of transformation. And with visionary leadership, as exemplified by Prof. Mudida and the CBK, Kenya is positioning itself to harness this force not just for stability, but for shared prosperity.

Panel Spotlight: Leveraging Data to Deepen Financial Inclusion and Diaspora Investment

During the panel session, Cappitus Chironga, Deputy Director of Financial Sector Analysis at the Central Bank of Kenya (CBK), delivered a critical intervention on the role of data, technology, and research in improving the inclusiveness and effectiveness of Kenya’s financial ecosystem—especially in relation to remittance flows and diaspora engagement.

Chironga acknowledged the challenges associated with gathering high-quality national data, particularly citing the cost-intensive FinAccess surveys—carried out periodically since 2006—as a case in point.

To address this, CBK has launched initiatives such as the Enterprise Data Warehouse and improved data integration projects aimed at real-time financial behavior mapping. These tools are expected to empower policymakers, financial service providers, and researchers with more accessible and dynamic insights into Kenyan households and diaspora-related financial flows.

Chironga emphasized that CBK maintains extensive historical data on diaspora activity—particularly remittances—available freely via the CBK and Kenya National Bureau of Statistics (KNBS) websites:

He encouraged researchers and development partners to interact with the available datasets and even make suggestions on data types or formats they require:

From Data to Policy: Driving Financial Inclusion

Drawing from national financial inclusion goals, Chironga stated that data has directly influenced the National Financial Inclusion Strategy, which is structured around six key pillars. Among these is a targeted effort to reduce financial exclusion from the current 10% to below 5%, focusing on marginalized groups such as refugees, persons with disabilities, and youth.

He further noted that diaspora data is particularly useful in measuring the financial health of Kenyans abroad, touching on two critical dimensions:

1. Coping with emergencies – such as access to medical insurance and support for unexpected financial shocks.

2. Growing wealth – especially through investment in Kenya’s financial markets and property sectors.

Chironga concluded with a strong endorsement of data-driven strategies as essential to Kenya’s forward momentum in building a more inclusive financial system:

Exclusive Interview with Boniface Munzala (ndc) (K)

Director, Foreign Service — State Department for Diaspora Affairs, Ministry of Foreign & Diaspora Affairs, Republic of Kenya

Q: What are stakeholders being asked to do to enhance remittance inflows to Kenya?

A: The State Department for Diaspora Affairs has actively engaged stakeholders to prioritize diaspora engagement in remittance flows. We are urging them to help us lower the cost of sending money back home and to make remittances faster, more affordable, and accessible.

One key area we're promoting is digitalization. Traditional bank-to-bank or card-based transfers are costly. We’re working with banks and other financial institutions to shift toward digital platforms and mobile technologies—something Kenya is already quite advanced in. This reduces transaction costs and simplifies the process for both senders and recipients.

We're also encouraging SACCOs and banks to establish diaspora-focused service units that not only receive remittances but also offer tailored financial products like savings and investment options.

Q: What role can blockchain play in making remittances more efficient for Kenyans abroad?

A: We are currently in discussions with the Central Bank of Kenya (CBK) and other banking sector stakeholders to explore the potential of blockchain technology in the remittance space. Initially, CBK was cautious about blockchain, largely due to experiences in other jurisdictions. However, with proper regulation and frameworks, this technology could offer new efficiencies.

As the State Department, our role will be to translate any progress into clear, actionable information for the diaspora community. Once there’s clarity from CBK and financial institutions, we’ll develop and disseminate information packages through our missions and diaspora associations worldwide.

Q: You’ve described remittances as a strategic national asset. How can Kenya shift both public and private sector mindsets to reflect this in policy and investment?

A: It starts with recognizing the economic power behind each dollar sent home. We're engaging players in the remittance ecosystem to better understand the sender-receiver dynamics. Many recipients live in rural areas—most of them women—so financial inclusion and digital literacy are essential.

We are pushing for remittances to transition from mere financial transactions to tools for savings and investment. For example, if someone sends $100 to their mother monthly, not all of it needs to be spent. Some could be saved or invested in financial products. This builds long-term resilience in areas like health, education, and small businesses.

Our goal is to link remittances to sustainable national development, and that requires collaboration across ministries, stakeholders, and private actors.

Q: What incentives or policy changes would encourage banks and fintechs to reduce remittance costs and expand services?

A: We’re working closely with regulators like CBK, the National Treasury, and the Capital Markets Authority to create diaspora-specific financial products and policy frameworks. Involving these bodies in our diaspora engagements is key.

For instance, we recently facilitated a CBK delegation's meeting with the Kenyan diaspora in Dubai. These interactions help financial institutions understand diaspora needs and co-create suitable services. The more tailored the products, the greater the contribution to national development.

Q: How can diaspora funds support climate-smart development, such as renewable energy or drought-resilient agriculture?

A: Kenya is already a global leader in green energy, with 80–90% of our power generated from renewable sources. We're now exploring how diaspora investments can support climate adaptation—especially in agriculture.

We see great potential for diaspora involvement in areas like drought-resistant crops, irrigation technologies, and clean energy. Community-based green projects also present opportunities for people to invest in protecting their homes and environment. It’s about empowering diasporas to support climate resilience in the regions they care about.

Q: What regulatory or cross-border hurdles still hinder remittance efficiency, and how is the government addressing them?

A: One of the major barriers is the high cost of remittances originating from the sending countries. We're working through bilateral agreements to lower these costs and improve the interoperability between banks, fintechs, and mobile money operators across borders.

We’re also pursuing double taxation agreements with key host countries to ensure Kenyans abroad aren’t taxed twice on the same income. Resolving such bottlenecks will go a long way in increasing the efficiency and attractiveness of formal remittance channels.

Q: Beyond the headline figure of US$4.94 billion in remittances, how is Kenya tracking their socio-economic impact?

A: We are now placing more emphasis on understanding the impact of remittances on the recipient side. Institutions like the Kenya National Bureau of Statistics and FSD Kenya are conducting studies to assess this.

The data show significant social value—remittances help households access healthcare, education, and even seed private enterprises. We're focusing on building a resilient rural economy, and remittances play a central role in that.

To support this, we’ve developed a Diaspora Investment Strategy with input from various stakeholders, including the Commonwealth. The strategy highlights new investment avenues beyond traditional areas like real estate—such as agro-processing, climate adaptation, and value addition in agriculture—so that the diaspora can diversify their contributions to Kenya’s development.