Kenya urged to relax immigration laws

The government has been urged to relax its immigration policy in order to attract huge inflow of remittances from Kenyans living and working abroad.

Kwame Owino

The Institute of Economic Affairs (EAC) has also emphasised the need to foster competition in money transfers, including provision of efficient and safe financial services in order to tap into the huge foreign inflow potential.

Chief Executive Kwame Owino said the Government should also consider investment in diaspora bonds, protection of migrant labour and avoid taxation of immigrants’ income in order to grow the country’s diaspora inflows.

“The scope of raising inflows exists. To tap this potential it is important that we maintain a liberal immigration policy which is an important part of Kenya’s diplomatic relations,” he told a financial sector conference and exhibition in Nairobi yesterday.

Available data shows that remittances from Kenyans living abroad increased from US$300 million (Sh25.8 billion) in 2004 to US$1.2 billion (Sh103.2 billion) in 2012, surpassing earnings from coffee and tea exports.

Diaspora inflows

Remittances from North America (US and Canada) and Europe accounted for 80 per cent of the inflows during the 2012/2013 fiscal year. According statistics 50 per cent (US$600 million) of the diaspora remittances come from US and Canada while 30 per cent (US$400 million) from Europe.

“These two regions are important to Kenya in terms of diaspora inflows,” said Kwame.

He noted that foreign remittances currently form a significant source of foreign exchange for the country.

He said diaspora remittances are enough to provide a one-month import cover for the country.

“Kenya receives more inflows than the rest of the East African Community (EAC) countries combined,” he said.

In May diaspora remittances grew by five per cent (US$5 million) owing to a large number of Kenyans with gainful economic employment in North America, according to data from Central bank.

Kenyans living abroad remitted a total of US$110 million compared to US$105 million in April 2013.

In the year to May 2013, average remittance inflows increased to US$99.9 million from US$87.8 million (in the 12 months to May 2012.

North America accounted for 52 per cent of the remittance inflows, while Europe and the rest of the World accounted for 26 per cent and 21 per cent, respectively.

According to CBK North America’s dominant position is a reflection of the large number of Kenyans with gainful economic activities in the region.

North America also accounted for nearly half of the remittance inflows in April 2013, while Europe and the rest of the World accounted for 27 per cent and 24 per cent, respectively.

A remittance is money sent by a person in a foreign land to his or her home country. Due to the huge sums involved, remittances are now being recognised as an important contributor to the country’s growth and development.

CBK conducts a survey on remittance inflows every month through the formal channels that include commercial banks and other authorised international remittances service providers in Kenya.

The Government is working on a diaspora policy that will pave the way for the creation of key institutions to harness resources of an estimated three million-strong Kenyan community abroad.

By JAMES  ANYANZWA, The Standard

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