Central Bank of Kenya data show that total remittances in the January-September 2026 period fell slightly to $3.769 billion (KSh489.22 billion) from $3.774 billion (KSh489.87 billion) in the same period last year.

The 0.14 per cent decline reverses a 3.7 per cent growth recorded in the nine months to September 2025 and the 17.14 per cent expansion seen in the corresponding period of 2024.

Inflows from North America, which are largely US-sourced, dropped 11.19 per cent to $1.946 billion (KSh252.59 billion) from $2.191 billion (KSh284.39 billion), a loss of $245.2 million (KSh31.83 billion).

The contraction coincided with the introduction of a one-per-cent US tax on certain money transfers from January 1 and with rising living costs that have squeezed disposable incomes of Kenyan workers in the United States.

Although the CBK report did not isolate United States data, the predominance of US flows in the North American figure makes the region the biggest drag on Kenya’s diaspora remittance performance.

Remittances from Europe rose 16.87 per cent to $798.4 million (KSh103.63 billion) from $683.1 million (KSh88.66 billion).

Inflows from the rest of Africa increased 13.86 per cent to $1.025 billion (KSh133.05 billion) from $899.8 million (KSh116.79 billion).

Combined, Europe and the rest of the world added $240.5 million (KSh31.22 billion), almost offsetting North America’s shortfall of $245.2 million (KSh31.83 billion) and leaving total remittances lower by $5.2 million (KSh674.96 million).

Governor Kamau Thugge flagged the US slowdown and weaker Saudi inflows after the Monetary Policy Committee meeting on October 8.

He said remittance inflows remained resilient in the 12 months to August 2026, supported by diversified source countries and government policies to export skilled labour.

He added that the inflows slowed mainly reflecting reduced contributions from the United States and Saudi Arabia.

Thugge projected remittance growth of 0.7 per cent for the current year and 3 per cent in 2027.

He noted a modest recovery in the last two months and that the decline for January-August 2026 was –0.7 per cent.

He reiterated that the slowdown was largely due to reduced inflows from the US and Saudi Arabia.

The decline threatens household spending on school fees, medical bills, housing and daily needs and could reduce foreign-currency inflows, putting pressure on the shilling.

US inflation rose from 2.4 per cent in February to 4.2 per cent in May, eased, and then increased to 3.7 per cent in September.

The transfer tax may have added cost, although the remittance data do not isolate its impact.

The Iran-related war disrupted global supply chains, raised transportation costs and inflation, and moderated growth, according to the Monetary Policy Committee in June.

Thugge warned that the conflict directly affected Gulf remittances, which represent about 10 per cent of total inflows.

Saudi Arabia’s new labour-market reforms tightened conditions for foreign workers, affecting Kenyan employees in domestic work, cleaning, driving and other basic occupations.