According to official figures, remittances from Uganda to the diaspora increased by double in the first five months of this year compared to the same period last year, despite an increase in overall flows of 1.81%.
During the review period, the expatriate community in Uganda wired $23.46 million through official channels, an increase of 100.82% over the $11.68 million sent during the same time last year.
According to figures maintained by the Central Bank of Kenya (CBK), the inflows were significantly bolstered by monthly inflows of $8.85 million in May, which propelled the landlocked nation to become the fifth largest source internationally behind the US, Saudi Arabia, the UK, and Germany.
The CBK data often does not explain changes in remittances from the diaspora in its official report, but the Kenya Diaspora Alliance (KDA) said that one of the factors driving the inflows was the strengthening of the Ugandan shilling relative to the Kenyan shilling.
On Thursday, the Kenyan shilling averaged 26.08 Ugandan shillings, down 13.39% from the 30.11 exchange rate at year's end.
This has occurred at a time when dollar inflows from Kenyans living outside of the country, which is the main source of foreign exchange before tea exports and tourist revenues, have slowed to single-digit growth this year compared to double-digit surges in prior years.
For instance, the amount of remittances received between January and May was close to $1.72 billion, up 1.81% from $1.69 billion during the same time the previous year. According to the CBK statistics, this is a deceleration from growth of 16.86% in a comparable time last year and 23.09% in 2020.
Remittances from Kenyans living in the US, who make up about 60% of all flows, have decreased, which is primarily to blame for the slowing increase of these payments.
For instance, the US's inflows in the first five months of the year decreased by 5.04% from the same period last year to $964.25 million.
