The United Kingdom, the US and South Sudan top the list of countries that receive large amounts of physical US dollars, euros and British pounds that are airlifted from Kenya amid limited regulatory oversight.
A Central Bank of Kenya (CBK) survey on cross-border movement of cash found the repatriation is mainly through air cash couriers (59 percent) followed by air cargo shipment (35 percent) and road (six percent).
The UK accounts for 42 percent of the hard currency that leaves Kenya, followed by the US (15 percent), South Sudan (15 percent), Switzerland (12 percent), Democratic Republic of Congo (eight percent) and Tanzania (four percent). The survey collected data from 38 commercial banks as of March 2025.
The CBK says this pattern reveals a strong financial relationship between Kenya and Western economies — including the UK, the US, Germany and Switzerland — which collectively account for over three-quarters of all outflows.
The survey adds that the main reason for cross-border cash movement is repatriation of foreign currency and promoting operational efficiency by meeting liquidity needs of foreign subsidiaries.
The main source of the cash is cited as customer deposits across branches, group subsidiaries, currency exchange agencies and central banks of other countries.
The CBK says group subsidiaries reflect internal financial transfers within banking groups, likely for treasury or operational purposes while currency exchange agencies are likely foreign exchange and money remittance providers or dealers.
However, the CBK cautions that the use of cash repatriations offers loopholes for criminals and other malicious actors to move illicit proceeds of crime across borders, bypassing financial institutions and regulatory oversight.
“The money laundering/terrorism financing risks faced during cross-border transportation of physical cash include; the source of physical cash is hard to trace, weak cross-border controls, tax fraud, the use of informal value transfer services such as Hawala and third-party risk and sovereign risk,” says the CBK.
While the CBK survey does not mention the amount of hard cash that leaves the country, a past report from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which monitors how the region is implementing global measures against dirty cash, showed billions of shillings leave and enter the country annually.
The ESAAMLG mutual evaluation report on Kenya released in September 2022 revealed that between January 2017 and March 2021, a total of $1.85 billion (Sh239 billion), €6.97 million (Sh1.06 billion), £7.80 million (Sh1.37 billion) and Sh482.84 million had left Kenya in cash without sufficient explanation. This totals to Sh241.91 billion or Sh56.92 billion annually at current exchange rates.
In the same period, Kenya received $455.35 million (Sh58.84 billion), €34.34 million (Sh5.22 billion), £11.69 million (Sh2.05 billion) and Sh482.84 million from foreign countries. This adds up to about Sh66.59 billion using the current exchange rates.
ESAAMLG questioned Kenyan authorities’ explanation that the huge cross-border physical movement of cash is attributed to the robustness of the country’s financial system.
The authorities told ESAAMLG, for instance, that Kenyan banks engage cash in-transit courier companies to move physical cash to their foreign branches while several international humanitarian agencies, agencies and embassies based in Kenya move physical currency within the region and use cash as opposed to electronic transfers to address liquidity challenges in those jurisdictions.
“While this may be a legitimate purpose of the US dollar outflow, the same reason cannot apply in relation to US inflow and movement of Kenyan shillings in both directions,” said ESAAMLG in the evaluation.
Sixty-seven percent of the banks surveyed by the CBK said they had experienced instances of cash smuggling or irregularities in cash declarations. However, they indicated that such incidences rarely occur.
According to the survey, while the country has made significant strides in strengthening its anti-money laundering, combating the financing of terrorism and proliferation financing framework, the detection and prevention of illicit cross-border cash movements, especially cash couriers and smuggling, remains “an area that requires attention and improvement.”
Currently, banks report cash transaction reports to the Financial Reporting Centre and the CBK on a weekly basis. They also make quarterly submissions to the CBK on total cash repatriated into and out of the country.
