Remittances from Europe drop as Brexit jitters hit

Money sent by Kenyans living in Europe reduced by 6.3 per cent last month as the decision by Britain to exit the European Union began to affect inflows.

The Central Bank of Kenya data released yesterday show remittances from Europe dropped to $43.7 million(Sh4.4 billion) in June from $46.6 million(Sh4.7 billion).

Total money sent however increased to $156 million (Sh15.8 billion) from $146.7 million (Sh14.8 billion) in May.

Britain voted last month to leave the European Union, a move termed Brexit. Analysts said the move would impact the EU and Britain’s economy negatively at least in the short term.

Following the decision to leave the EU, Britain’s sterling pound weakened immensely by more than 10 per cent to hit a 30-year low.

One of the largest Africa-based money transfer businesses, Dahabshiil, warned shortly after the UK’s Brexit vote that the move will hit remittances and affect investments in the region.

Dahabshiil, which is very popular among Somalis and is the biggest financial services firm in Somalia said the stability of the sterling and the euro across the UK and in Europe have been good for remittances, trade and investment in Africa.

“Remittances and other business transactions from the UK and generally from Europe have changed the lives of many in Africa. Brexit is likely to increase uncertainty and market volatility, which might translate to slower economic activity and affect trade relations,” he said.

Remittance inflows from North America increased by 11.9 per cent to $76.9 million (Sh7.79 billion) and accounted for 49.3 per cent of total inflows in June. Inflows from Europe accounted for 28 per cent of total inflows compared to 31 per cent portion last month. Cash sent from the rest of the world increased by 13 per cent to $35.5 million (Sh3.6 billion) and accounted for 22.8 per cent of total inflows.

Source: The Star

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