Kenya's Gulf Remittances Drop to Five-Month Low as Middle East Conflict Disrupts Flows

Kenyan families that depend on money from relatives in the Gulf are facing a sharp financial squeeze after remittances fell to their lowest level in five months, central bank data shows.

<cite index="18-9">Remittance inflows declined by 11 percent month-on-month to $397.8 million from $450.3 million in March</cite>, according to the Central Bank of Kenya. <cite index="18-10">Compared with the same period last year, inflows were down 5.9 percent from $422.9 million</cite>. The April figure represents the sharpest drop since November 2025.

Middle East conflict hits worker incomes

<cite index="18-11">The decline comes as tensions involving Iran continue to disrupt Gulf economies, where hundreds of thousands of Kenyan migrant workers are employed, raising concerns about weaker household consumption, slowing foreign exchange inflows and mounting pressure on the country's external balances</cite>.

<cite index="13-6,13-7">The sharpest decline has been recorded in Gulf states, where many Kenyans work in domestic service, construction, and hospitality. Conflict in the Middle East has disrupted trade routes and increased government spending on defence, leaving many migrant workers facing delayed wages, job losses, and worsening insecurity</cite>.

<cite index="20-7">The World Bank's April 2026 Africa Economic Update warned Kenya could face monthly losses of up to US$ 40Mn from Gulf remittances due to the Middle East conflict, citing approximately 500,000 Kenyans employed in Gulf states</cite>.

<cite index="18-3">Kamau Thugge, CBK's governor, recently lowered the country's 2026 remittance forecast from $5.42 billion, citing risks tied to the Middle East conflict and Saudi Arabia's 15 percent VAT on money transfer transactions</cite>.

Saudi corridor weakens sharply

<cite index="18-5">Flows from the kingdom fell 25.1 percent in 2025 to $302.1 million from $403.1 million a year earlier, reflecting both higher transaction costs and sweeping labour permit reforms introduced in mid-last year</cite>.

The Senate Standing Committee on Labour and Social Welfare <cite index="1-1">reports that around 80,000 Kenyan workers are in Saudi Arabia and 60,000 in the United Arab Emirates (UAE), a majority being domestic workers</cite>.

Families feel the pinch

<cite index="13-14,13-15">Families in rural areas that relied on monthly transfers from relatives working in cities such as Dubai and Doha are facing increasing food insecurity. Health clinics report fewer people seeking preventive treatment, while the construction sector has slowed as diaspora-funded projects are postponed or cancelled</cite>.

<cite index="13-9,13-10">In Europe and North America, inflation has reduced the disposable income of many migrants who previously sent a large share of their earnings home. Higher costs for housing, energy, and food have limited their ability to continue supporting relatives in Kenya at previous levels</cite>.

<cite index="13-12">Reduced consumer spending, defaults on microfinance loans, and rising school dropout rates are among the risks linked to the fall in remittances</cite>, economists warn.

Currency pressure mounts

<cite index="18-6,18-7">The remittance slowdown comes as Kenya's foreign exchange reserves remain under pressure from rising global oil prices and increased currency market intervention. The country's reserves fell from $14.5 billion in early March to a low of $13.2 billion by late April before recovering modestly to $13.5 billion as of May 14, equivalent to 5.7 months of import cover</cite>.

The government has scheduled a virtual investment forum for Kenyans in the Gulf on May 23 to encourage diaspora-led investment, but families facing immediate hardship say they need urgent support to weather the current downturn.

Reporting drawn from Businessday NG, Kenyan Wallstreet, Mwakilishi, KIPPRA.