Remittances: Government Should Be Accountable on Diaspora Billions

19 mins read

The government and its big boys held a so-called Kenya Diaspora meeting in Nairobi.

Other than Musalia Mudavadi who spends his entire time traveling abroad which, maybe, makes him a Kenyan in Diaspora, there were no Kenyans living outside the country or their organizations at the meeting to offer ideas on the best ways for Kenyans out here to contribute to the economy and the country as a whole.

I am one of those Kenyans in Diaspora.

I have lived in Toronto Canada for 34 years. My son always tells me that I have lived in Canada more than I have lived in Kenya.

I came to Canada in November 1989 after being a Kenyan refugee in Tanzania for two years. We were under the auspices of the United Nations Commission for Refugees (UNHCR) and we were moved out of Tanzania because the government told the UNHCR that the Kenya government was trying to grab and smuggle refugees back to Kenya and they had sent spies to Tanzania to do that job.

Just before we left Tanzania, the Canada National Film Board (NFB) was doing a documentary on which immigrants are allowed in Canada as workers between Africans and Asia. The Documentary “Who Gets In?” was done by Barry Greenwald and I was invited to participate in it which I did and it brought a big light onto Kenyans in Tanzania who could work in Canada.

When we went for interviews to go to Canada we were told Canada can accept us in a program called “New Workers” and you have to convince the Canadian government that you are qualified to work in Canada.

I told them before I was taken to Nyayo House in Kenya and tortured to near death and then jailed for 15 months at Kamiti Medium Prison, I was a lecturer at the Mombasa Polytechnic teaching Accounting to students, most of whom were already working for the government and for the private sector. I am very proud of my work with those students.

Then after the interview, the Canadian government told me I have the qualifications to work in Canada and they took me there. In Canada, I went back to school to study Social Work and my first job was at Across Boundaries, a health institution for people of color in Toronto and I have been working in Canada since 1995 and have been in my current job placement since 1997.

Canada brings new workers based on their qualifications and it has nothing to do with deals between the government of Kenya and Canada or any other country.

And once we are out here we try to invest in the country because we know it is the only home we have.

Today, my sisters and I are building real estate in our town. We are doing four houses now. My sister is an established real estate investor in our hometown. So we just work. It is tough.

Me, I want to do a bakery business in my home town.

If I can buy bakery equipment in Canada and bring that to start a bakery production in Kenya without being forced to pay so many Excise taxes and VAT which triples the price of the investment we will get going. The Ruto government is not even talking about that possibility.

Yes remittances from us are big but it is a minor fraction of what Kenya Diaspora can do for the economy which they love.

My sisters and I are building four houses on our property in our municipality for rent and another one as a family house. I am out here and they are in there and they are saying work has to go on.

So we do remittances for investment every month. The big problem is that we cannot do industrial investment transfer because of the excise duty and VAT taxes. If you buy industrial equipment out here you pay taxes for it. Then you bring it to Kenya and you pay triple more taxes. You just can’t do it.

Now DP Gachagua is telling us that the Ruto government will stop our family members from robbing us. No. Just stop the government from robbing us with taxes on equipment for industrial development. We are Okay with our family members. Thank you.

Cut off the home tax for Kenyans bringing industrial production equipment to the country and Kenyans in Diaspora will bring in trillions worth of investment every year.

All the talk from Ruto’s big mouths really means nothing. Here are the facts as we know. today.

Africa now fastest growing source of diaspora flows to Kenya

Remittances, which are the single-biggest source of forex inflows into Kenya, stood at $4.3 billion, beating earnings from tourism ($1.85 billion), tea ($1.13 billion) and horticulture that brought in $1.1 billion last year.

Diaspora remittances from African countries to Kenya posted a 42 percent growth in the seven months to July as more Kenyans continue to seek jobs and study abroad, especially in the continent.

The Central Bank of Kenya (CBK) data reveals that in the seven months to July, Kenyan citizens living in other African countries wired $164.4 million (Ksh22.2 billion), up from $116 million (Ksh15.6 billion) last year.

The growth is the fastest among all continents in a period when North America and Europe are coming from high inflation that averaged eight percent in the US and 7.9 percent in the UK.

Most of the cash from those residing abroad is spent on consumption, with North America accounting for 60 percent.

The search for ‘greener pastures’ in terms of employment and education is the biggest factor pushing Kenyans to go try their luck abroad.

Uganda and Zambia are an example of countries offering better opportunities for Kenyans.

Inflows from Zambia more than doubled, growing 136 percent to $5 million, followed by Uganda, which posted a 113.5 percent growth in cash sent back home by Kenyans.

Inflation in the US has since eased to 3.2 percent in July. But with cumulative seven-month inflows, the world’s biggest economy still declined by 1.6 percent ($22 million) to $1.36 billion.

Remittances, which are the single-biggest source of forex inflows into Kenya, stood at $4.3 billion (Ksh483 billion last year), beating earnings from tourism (Ksh268 billion-$1.85 billion), tea (Ksh163 billion-$1.13 billion) and horticulture that brought in Ksh152.2 billion ($1.1 billion) last year.

High global inflation brought by geopolitical tensions led to the United States raising its interest rates, which resulted in contractionary global monetary policies and a preference for government securities as investment assets due to a reduction in inflows into Kenya.

On the flip side, inflows from Middle East countries posted a significant drop in the period, with Bahrain posting an 80 percent reduction from $5.6 million last year to $1.1 million this year.

Qatar posted a 38.4 percent fall to $31.9 million, while inflows from Oman declined to $1.1 million (68 percent).

South Africa also posted a significant drop halving to $6.3 million from $13.5 million in the January-July period last year.

MWAURA: Diaspora enterprising abroad, great potential for investment at home

This week, our fellow Kenyans in the diaspora have come home to a warm welcome at the KICC, for the inaugural Diaspora Investment Conference organised by the State Department for Diaspora Affairs.

Some came straight from the airport to hear President William Ruto in a panel discussion with key diaspora representatives. It’s important to understand there are so many Kenyans out there in many countries, trying to make a living and look for opportunities.

As of 2020, there were more than 535,000 Kenyans living abroad, representing only 1.07 per cent of our population estimated at 50 million. Total number of Kenyans abroad are currently at three million, which translates to six per cent.

These great Kenyans remit more than $4.02 billion, translating to more than Sh600 billion, as of September 2022. The remittances increased by 8.34 per cent in 2022, thus closing in on exports that generated $5.77 billion (Sh894.4 billion).

The US is the highest population-wise, with about 157,000 Kenyans, while the UK hosts about 139,400 Kenyans. Saudi Arabia alone has more than 100,000 Kenyans. These Kenyans’ contribution is more than coffee or tea in terms of foreign exchange.

The diaspora in any country is critical to its development in terms of financial contributions either through remittances or Foreign Direct Investment, and technology transfer. Two countries that have leveraged on this are China and India, with China sending its students to study abroad in the US, and the UK. This has led to a lot of technology transfer on their part.

China has more than 10.7 million Chinese overseas, translating to more than 60 million, if their descendants are also included in the tally, according to the International Organization of Migration. The United Nations estimates that more than 17.9 million Indians born in the country are recorded as living abroad.

These two countries are projected to be the first and second biggest economies by the year 2048, according to the World Bank’s Nominal GDP rankings.

It therefore follows the diaspora is a very critical component of any country that seeks to advance itself into prosperity. If only one percent of our population abroad can contribute to approximately 16.9 percent of our annual budget as of 2023-24, then there is need to refocus on how we can leverage this opportunity to spur our own development.

Kenya is endowed with among the world’s best human resources. I remember recently when I visited Namibia, I met Victoria Mwaniki who is a managing director of a chain of hotels in the country. It’s actually true the Kenyan diaspora has produced descendants who have gone ahead to lead countries such as the US and the UK. Barack Obama, the first black US president, and Rishi Sunak, the first British Prime Minister of Asian origin, can all trace their ancestry to Kenya.

President Ruto’s administration has recognised this, and he has since established the State Department for Diaspora Affairs, led by PS Roselyn Njogu, under the Prime Cabinet Secretary Musalia Mudavadi.

This year’s Inaugural Diaspora Investment Conference is aimed at helping Kenyans living abroad to make sound investment decisions back in their motherland.

For example, the affordable and social housing programme provides them an opportunity to own a home for as little as little as Sh400,000 through a 3,000 tenant purchase, rent to own agreement with the government, under the State Department for Housing. This eliminates situations whereby relatives defraud their own when left to manage such projects for them.

In addition, more than 14,000 government services are now digitised on e-Citizen platform, including land searches. This means that from the comfort of their homes, Kenyans living abroad don’t have to incur huge expenses to travel back here to transact basic public services.

Moreover, while the older generation of diaspora members has been accused of making investment decisions based on emotions rather than facts, their descendants who have no social attachment with their parent’s motherland, earn up to 10 times more, and can therefore make more sound investment decisions.

The Diaspora Investment Fund can play a critical role in bankrolling huge infrastructure projects, rather than borrowing money from other people and countries. For example, the Saudi Investment Bank has just acquired a 12 per cent share of Heathrow Airport.

The Kenyan Diaspora can thus be part of the privatisation process in Kenya to leverage their advanced exposure to technology and other resources that would be beneficial to government-owned enterprises that are currently depending on the exchequer for their sustainability.

The diaspora needs services from their contribution and it’s commendable to note that for the last one year, the government has been able to rescue more than 1,350 Kenyans in situations of distress across the world. Soon, a new consulate is also going to be opened in Bogota, Colombia, attached to Brazil. Newly appointed ambassadors have been briefed to look for jobs for Kenyans in their host countries.

In the future, it will be important for the diaspora to be represented in Parliament through the 12 nomination slots, a practice already in use in countries such as France, which has diaspora MPs elected by the French, and segmented according to the zones overseas where they live. It’s also important for national legislation to be amended to include the diaspora in key bodies that superintend their affairs at both the national and international levels.

Kenya will prosper, Kenya shall rise again, Kenya will stand strong, in the spirit of patriotism, honesty, courage, fairness and Godliness.

Prime CS Mudavadi Assures Kenyans In Diaspora Of Gov’t Support.

Prime Cabinet Secretary (CS) Musalia Mudavadi has assured the diaspora community that the Kenya Kwanza administration will be ready to engage with them to make Kenya a better place  for investment.

Speaking at a gala night held on Friday evening to celebrate the conclusion of a 3-day diaspora investment conference in Nairobi, Mudavadi noted that President William Ruto’s administration has allowed open and candid conversation among Kenyans to enable the government serve its citizens better.

“The government of President Ruto is committed to ensuring that our dreams are collectively released. No one should be left behind and no part of this country should be left behind,” said Mudavadi.

“The institutions in our country, our devolved units must all work.”

The Prime CS likewise called on Kenyans in the diaspora to take part in investing back home as a way of boosting the country’s economy and creating jobs.

Mudavadi’s sentiments were shared by Diapsora Affairs PS Roselyn Njogu who noted that the diaspora community’s contribution to Kenya’s transformation agenda will support the Government’s aim of improving the livelihoods of millions of Kenyans, particularly in rural areas.

“Invest at home, find job opportunities and open up trade routes,” she said. 

And don’t forget Kenyan exported workers going to Haiti and Israel.

Read: All Kenyans Will Stand With Our Police in Haiti, God Bless Them. But, What Do We Know About the Carribean Nation?

Adongo Ogony is a Human Rights Activist and a Writer who lives in Toronto, Canada

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