Kenya’s diaspora remittances have registered their first year-to-date decline of 2026, reflecting growing pressure from economic and labour market disruptions in the Gulf region.
According to the latest figures, cumulative remittance inflows between January and May 2026 stood at KSh267.68 billion (US$2.07 billion), representing a 1.4 per cent drop compared to US$2.10 billion received during the same period in 2025.
The downturn has largely been attributed to the ongoing conflict in the Middle East and challenges affecting employment opportunities for Kenyan workers in Saudi Arabia and other Gulf states.
May Remittances Continue Downward Trend
In May 2026, Kenyans abroad sent home KSh51.06 billion (US$394.2 million), a 10.4 per cent decline from the US$440.08 million recorded in May 2025. Compared to April’s US$397.8 million, remittance inflows remained largely unchanged, signalling sustained weakness in one of Kenya’s most important foreign exchange sources.
The May figures marked the second consecutive monthly decline following a 5.9 per cent contraction recorded in April.
Economists say the trend aligns with concerns raised by the World Bank in its April 2026 Africa Economic Update, which warned that Kenya could lose up to US$40 million in monthly remittances due to the ongoing instability in the Gulf region.
An estimated 500,000 Kenyans working in Gulf countries face uncertainty arising from disrupted incomes, delayed contract renewals and challenges in money transfer channels.
Gulf Pressures Weigh on Outlook
Renaissance Capital’s Global Chief Economist Charles Robertson noted similarities between Kenya’s remittance slowdown and recent declines experienced by Pakistan, highlighting the significance of Gulf economies to both countries.
The Central Bank of Kenya has since lowered its expectations for remittance growth in 2026, projecting total inflows of US$5.11 billion by year-end. This would represent growth of only 1.5 per cent from the US$5.04 billion recorded in 2025.
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The revised forecast reflects concerns over the impact of regional tensions, including the Iran conflict, as well as Saudi Arabia’s 15 per cent value-added tax on money transfer transactions.
The Saudi remittance corridor had already experienced a sharp decline in 2025, with inflows falling by 25.1 per cent to US$302.1 million from US$403.1 million the previous year. With year-to-date remittance growth now in negative territory, achieving the Central Bank’s annual target may depend heavily on a stronger performance in the second half of the year.
Signs of Possible Recovery
Despite the recent weakness, there are indications that conditions could improve in the coming months.
Brent crude oil prices, which surged to US$126.41 per barrel at the height of tensions involving Iran in April, have since retreated to US$79.57 as diplomatic efforts and ceasefire discussions eased concerns over a prolonged conflict.
Lower oil prices could help stabilise Gulf economies and support employment conditions for migrant workers, potentially improving remittance flows. If the current de-escalation continues, June’s figures may provide the first indication of a recovery in key remittance corridors.
Diaspora Contribution Larger Than Official Estimates
Meanwhile, a Kenya National Bureau of Statistics household survey released in June revealed that official remittance data may significantly understate the actual contribution of Kenyans living abroad.
The survey estimated that total diaspora inflows, including informal transfers, reached KSh931.8 billion during the 12 months to May 2025. This compares with the Central Bank’s official figure of KSh651.2 billion for the same period, suggesting actual diaspora support to households and the wider economy could be approximately 43 per cent higher than recorded through formal channels.
