Preparing Kenya’s diaspora for 5th Industrial Era opportunities

In 2017, diaspora remittances became Kenya's leading source of foreign exchange earnings, surpassing the revenues generated from tea, horticulture, coffee, and tourism.

Last year, Kenyans working and living abroad were the biggest contributor to the country’s forex reserves, bringing in a whopping Sh650 billion.

The Central Bank of Kenya has projected more inflows this financial year, with the latest weekly bulletin by the apex bank indicating that amount sent last month increased by $18.7 million (Sh2.4 billion), pushing October inflows to $437.2 million (Sh56.7 billion) from $418.5 million (Sh54.4 billion) a month earlier.

Cumulatively, the amount sent in the past 10 months hit $4.8 billion (Sh623 billion) compared to $4.1 billion (Sh532 billion) in the same period last year.

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The inflows continue to surge, defying pessimistic forecasts by various bodies including the World Bank, which had predicted that a fall in remittance flows to Low- and Medium-Income Countries (LMICs) in the face of global inflation and low growth prospects.

Yet the contribution of this segment of Kenyans goes beyond these numbers. They play a vital role in supporting the education and healthcare needs of their families and communities back home, with many contributing by organizing fundraisers for construction projects in schools and hospitals.

Some have created scholarship programmes to aid students from disadvantaged backgrounds, offer mentorship to students in Kenya, either online or in person, giving also valuable advice on career paths.

A Diaspora Remittance Mapping in Kenya conducted by Pangea Trust between April and June indicated that food, medical expenses and school fees took up to 50 percent of the amount sent back home.

This is, however, an improvement compared to five years ago when up to 75 percent of diaspora remittances was used to settle household needs.

The survey that sampled 157 respondents from 27 countries where Kenyan citizens work indicated a growing appetite for investment opportunities in Africa from the diaspora.

The Pangea Trust study however shows the current investment decisions are largely driven by the availability of information on what investment opportunities exist and importantly by the level of knowledge on how to choose the most optimal investment options.

There are a host of challenges limiting the full participation of the Kenyan’s population abroad in the country’s social economy. For instance, the cost of remitting money back home through the existing formal channels is still high, leading to the use of informal channels.

This forces some remitters resort to informal or semi-formal channels, which makes it difficult for the government to track remittances and advise Kenyans appropriately on investment opportunities. It also discourages diaspora investors from using their resources for productive investments. Another disincentive is the unfavorable foreign exchange losses along the chain.

In addition, many Kenyans abroad may not have a clear understanding of how their contributions are used, or the tangible impact they create, leading to hesitancy in remitting. Navigating complex investment regulations, especially for individuals unfamiliar with Kenyan laws, presents a significant barrier to investing in education and healthcare infrastructure.

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Therefore, as the world enters the 5th Industrial Era, marked by unprecedented technological advancements and innovation, there is a pressing need for countries, especially developing nations like Kenya, to adapt and evolve to ensure resilience, sustainability, and economic prosperity.

The Kenyan diaspora, with its diverse wealth of knowledge, skills and networks, plays a pivotal role in this transformation.

It is against this backdrop that the 11th Annual Kenya Diaspora Homecoming Convention, scheduled for December 9-11 at the Radisson Blue seeks to bring together the Kenyan (and African) diaspora from around the globe, and friends of Kenya at large to engage in dialogue and activities focused on the development and prosperity of Kenya.

This year’s forum seeks to harness the skills and knowledge of the Kenyan diaspora for technology exchange, technical assistance, career upgrades and economic resilience. The edition will also feature for the 2nd year running a Deal Room, that will both link up small and big-ticket enterprises with capital owners abroad and at home, as well as connect exporters with importers direcoy.

Primarily, it is expected to promote climate resilience and sustainability in the development of Kenya by leveraging on technology and innovation. It will also see delegates explore avenues for economic transformation and growth for prosperity through diaspora engagement and investment.

Attendees will also explore ways to foster collaboration and exchange between and among the diaspora, academia, research, professionals, government, private sector, and civil society.

The Convention aims to culminate into a comprehensive action plan that outlines clear strategies and initiatives for harnessing the potential of the Kenyan diaspora in driving resilience and growth in the 5th Industrial Era.

The writer is a communications consultant