Kenya's diaspora remittances drop 5.9% in April as Gulf conflict threatens key corridor

Kenya's diaspora remittances eased to US$397.78 million (KSh 51.39 billion) in April 2026, retreating 11.7% from the all-time monthly high of US$450.29 million set in March and falling 5.9% year-on-year compared to April 2025.

The pullback was broad-based, with North America—which accounts for 52.2% of total April flows—falling 13.8% month-on-month to US$207.64 million, marking the sharpest regional decline. Europe dropped 12.9% to US$81.78 million, while the Rest of World corridor, which carries most Gulf exposure, fell by a more modest 6.2% to US$108.37 million.

Year-to-date figures for January to April 2026 stood at US$1.67 billion, up just 1.0% from the same period last year—a sharp deceleration from the 3.4% growth recorded at the end of Q1. Still, the 12-month rolling total to April reached US$5.05 billion, already within US$47 million of the Central Bank of Kenya's full-year target of US$5.1 billion.

World Bank flags Gulf risk

The April data comes as the World Bank's 2026 Africa Economic Update warned Kenya could face monthly losses of up to US$40 million from Gulf remittances due to escalating conflict in the Middle East. The bank cited disruptions to energy facilities and Strait of Hormuz shipping since late February, alongside approximately 500,000 Kenyans employed across Gulf states.

The Saudi Arabia corridor already recorded a 25.1% decline across full-year 2025 to US$302.1 million from US$403.1 million in 2024, driven by a 15% VAT introduction and a skill-based work permit overhaul in June 2025 that disrupted wages and contract renewals for thousands of Kenyan workers. A recovery in the Saudi corridor remains the Central Bank's primary basis for its 2026 growth projection.

April's corridor data suggests the conflict-related shock has not yet fully materialised, with Rest of World proving the most resilient of the three major regions in April.

Remittances still above US$5 billion

Kenya crossed the US$5 billion annual remittance threshold for the first time in 2025, cementing remittances as one of the country's most reliable foreign-exchange sources. The milestone came as the government launched its 2025–2030 Diaspora Investment Strategy, which aims to shift diaspora flows from consumption-driven household support to structured, long-term investment in priority sectors including technology, agriculture, renewable energy, and real estate.

The Central Bank has repeatedly cited remittances as a key buffer for external liquidity, with flows now ranking alongside—and at times above—exports and tourism as a foreign-exchange anchor.

FX reserves stage modest recovery

Kenya's foreign exchange reserves, which fell sharply from US$14.6 billion on March 5 to a low of US$13.2 billion on April 29, have since staged a modest recovery to US$13.5 billion as of May 14, according to CBK data. The April dip coincided with a period of heightened FX demand and debt servicing obligations.

Policy makers increasingly view remittances as more than household support, with the flows helping stabilise the balance of payments during periods of weak export receipts and tight external financing conditions. Whether Kenya can sustain monthly inflows above the US$400 million mark—and whether the Gulf corridor will recover or contract further—remains a central question for the rest of 2026.

Reporting drawn from The Kenyan Wall Street, Trading Economics, The Kenyan Wall Street (2025 report).