CENTRAL BANK OF KENYA
GLOBAL FORUM ON REMITTANCES, INVESTMENT AND DEVELOPMENT
Remarks by Dr. Patrick Njoroge
Governor, Central Bank of Kenya
June 14, 2023
United Nations, Gigiri, Nairobi
As prepared for delivery
Good morning! It is an honor for me to join you at this Summit of the Global Forum on
Remittances, Investment and Development. This event aims to strengthen the existing
initiatives aimed at advancing the international agenda on remittances and diaspora
investment. I am pleased to note that during the Summit delegates will explore the new
opportunities and challenges in the global and Africa’s ecosystems, new digital channels,
and innovative business models as well as sharing experiences.
Remittances are inexorably tied to the stories of migrants. Stories full of courage,
endurance, desperation, successes, failures, guilt, redemption... The best and the worst of
life. Consider the desperation and courage of those migrants putting all their lot in a hardly
seaworthy boat in the Mediterranean Sea and a promise from a human trafficker. Consider
the story of an Afghanistan boy in the book “Kite Runner” by Khaled Hosseini. Or the
story of Sadio Mané, the celebrated Senegalese professional footballer who left home with
nothing, but now supports everyone in his region in Senegal. These are the stories of
migrants that need to be told.
Let me turn to the theme of the Summit, by acknowledging the important role of the
diaspora in economic development, mainly through remittances. The financial
contribution of diaspora remittances is significant. As the President of African
Development Bank remarked recently, “Africans in diaspora are Africa’s largest
financiers. Remittances from the diaspora to Africa grew from US$37 billion in 2010 to
US$96 billion in 2021. Total Official Development Assistance to Africa in 2021 was
US$35 billion or 36 percent of remittances from diaspora.” According to data from the
World Bank, remittance flows to low- and middle-income countries increased by 4.9
percent to reach US$626 billion in 2022, even as global flows are estimated to have

reached US$794 billion in the same year. Further, remittances now represent a prime
source of external finance for low- and middle-income countries relative to other types of
flows, such as foreign direct investment (FDI), official development assistance (ODA),
and portfolio investment flows. Closer home, Kenya is the third largest recipient of
remittances in Sub-Saharan Africa, and it received US$4.0 billion in 2022, an increase of
8.3 percent compared to 2021, which represents over 3 percent of Kenya’s GDP.
Remittances have had massive impact on the lives and livelihoods of the recipients. Take
for example, Esther from Kenya, who worked in Saudi Arabia as a housekeeper for 7
years from 2012 to 2019. She was able to achieve 70 percent of her financial goals while
in Saudi Arabia and at the same time managed to build a 2-bedroom stone house in
Kabete, Kenya, educate her 3 children and take care of her mother’s as well as other
relative’s needs. Kenya’s digital landscape enabled her to achieve this by providing a
platform for transactions (M-Pesa) and for savings (M-Shwari). Esther is a return migrant
and believes that she would have achieved 100 percent of her financial goals had she
stayed longer.
However, the cost of sending remittances remains high especially in certain corridors.
According to the World Bank’s data, the cost of sending US$200 averaged between 5
percent and 10 percent worldwide, far exceeding the Sustainable Development Goal
(SDG) target of 3 percent. As a result of the high costs, remittance tickets remain sizeable.
In the case of Kenya, the adoption of technology and innovation has reduced costs
allowing for smaller bite-sized remittance tickets. Kenya’s 2021 Diaspora Remittance
Survey revealed that 32 percent of remittances are through mobile money operators, due to
the convenience, speed, and lower cost. Still, a lot needs to be done to reduce costs
towards the SDG target.
Remittances are used by recipients largely for daily expenditures, and not for investment
and growth. The 2021 Diaspora Remittance Survey revealed that the purchase of food and
household goods, medical and education expenses, rent, and household utilities constituted
49 percent of remittances. This indicates that the huge reservoir of human and financial
capital that represents the diaspora remains largely untapped. The diaspora should be an
important bridge between the host and the home countries. For instance, India success
story in the information technology (IT) industry is anchored on the diaspora. India is also
home to an increasing number of start-ups that have achieved unicorn status—enterprises
valued at more than US$1 billion—that have been founded by Indian diaspora.

The benefits from the diaspora should go well beyond the remittances. This is an
appropriate time for deepening the conversations on how the diaspora can contribute to
economic growth and progress especially in Africa where significant opportunities exist,
and significant resources will be required to put our citizens on the path of shared
prosperity. A UNDP report indicated that by 2050, more than half of Africa’s population
will be under 25. Additionally, 25 percent of the world’s labor force will be based in
Africa. Between 10-12 million people join the labour force in Africa each year, yet the
continent creates only 3.7 million jobs annually. This quandary can only be resolved
successfully with significant input from all those that have a connection with the
continent, and crucially, the diaspora.
Nevertheless, further work is needed to improve the business environment and thereby
attract additional investments. Kenya has implemented several measures to improve the
business climate, including significant investments in infrastructure, advancing innovative
use of technology, among others. These initiatives are key to promoting competitiveness
in the economy. A recent survey by US News and World Report ranked Kenya at position
26 globally—an improvement from position 39 in 2021—due to its resilience and
momentum. It was also ranked the best country to start and run a successful business
across the continent in 2022.
As I draw to a close, let me mention a new innovation that will expand the available
investment opportunities for the diaspora. This follows the digital innovations that allow
transactions to be conducted anytime anywhere and with small ticket sizes. CBK is
implementing a Central Securities Depository (CSD) that will improve efficiency and
transparency in the government domestic debt market. The CSD will mitigate
segmentation in the interbank market and enhance liquidity distribution by strengthening
the operation of the secured overnight market. More importantly, the CSD provides a new
and easy way to invest in Government securities and will therefore be beneficial to the
Diaspora. The Kenyans abroad will be able to register CSD accounts online, from
wherever they are, thereby mitigating the current inconvenience of having to come
physically to the Central Bank. They will also be able to invest in Government of Kenya
securities online. Additional investment channels in government securities, including
diaspora bonds, are also being considered.

I want to conclude with a poignant text from the little book “Sea Prayer” by Khaled
Hosseini. A father prays over his sleeping son as they wait for dawn and a boat to arrive,
to start their perilous journey towards the promise of a new life:
Pray God steers the vessel true,
when the shores slip out of eyeshot and we are a flyspeck
in the heaving waters, pitching and tilting, easily swallowed.
Because you,
you are precious cargo, Marwan,
the most precious there ever was.
I pray the sea knows this.
Inshallah.
This Summit offers an opportunity to chart a new path for engaging the diaspora. How I
pray the sea knows this. I wish you fruitful deliberations and a successful Summit.
Thank You!