The Central Bank of Kenya (CBK) expects money sent home by Kenyans abroad to grow by four percent to $5.24 billion (Sh676 billion) this year, supported by a rebound in inflows from Saudi Arabia after last year’s sharp dip triggered by labour policy changes.
Diaspora remittances grew by a modest 1.9 percent in 2025 to $5.04 billion (Sh650 billion), a steep slowdown from the 18 percent expansion recorded in 2024. CBK attributed the weaker performance largely to a 25 percent fall in transfers from Saudi Arabia, which dropped to $302.1 million (Sh39 billion) from $403.1 million (Sh52 billion) a year earlier.
Saudi Arabia had become one of Kenya’s fastest-growing remittance sources following increased recruitment of Kenyan workers into the Gulf, overtaking the UK in recent years. However, the introduction of a 15 percent value-added tax on services last year pushed up the cost of money transfers, while sweeping labour market reforms disrupted wages, contract renewals and onboarding for thousands of Kenyan workers.
CBK Governor Kamau Thugge said the regulator expects the slowdown to be temporary as the Saudi market adjusts to the new rules. He added that the central bank is projecting remittance growth of four percent in 2026 and five percent in 2027.
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From June 2025, Saudi Arabia rolled out a skill-based work permit system, replacing the long-standing iqama framework that treated all foreign workers the same regardless of profession or qualifications. Under the new model, workers are now classified as highly skilled, skilled or basic, based on education, experience, technical ability, wages and age.
Highly skilled workers include professionals such as doctors, engineers and senior executives, who must hold at least a degree and five years’ experience. The skilled category covers technicians and mid-level workers, while most Kenyans fall under the basic tier, which applies to entry-level and manual roles and caps eligibility at 60 years of age.
The slump in Saudi inflows saw the country fall behind the UK as a remittance source for the first time in three years, with UK transfers edging up by 0.7 percent to $360.2 million (Sh46.5 billion) in 2025.
The United States remains Kenya’s largest source of remittances, sending $2.73 billion (Sh352.3 billion) last year, accounting for more than half of total inflows. Diaspora remittances continue to be Kenya’s leading source of foreign exchange, ahead of tourism and agricultural exports, and a key pillar of the current account.
