In a surprising turn of events, Kenyans living and working in Tanzania sent more money home than their counterparts in Saudi Arabia for the first time in August. According to Central Bank of Kenya (CBK) data, cash sent home from Tanzania hit a record $11.72 million in August, narrowly surpassing the $11.61 million sent from Saudi Arabia. This significant shift marks a dramatic reversal in Tanzania's performance, which had been significantly smaller than Saudi Arabia since the CBK started publishing remittances by source country in 2019.
The changes come as Riyadh implemented a new system for foreign workers that replaced the decades-old one-size-fits-all iqama arrangement with classifications based on skills, qualifications, experience, salaries, and age. The framework divides foreign workers into highly skilled, skilled, and basic categories, aiming to boost productivity and align labor deployment with the country's economic transformation agenda. Reclassification of existing workers began on June 18, 2025, with enforcement starting on July 5, and recruits entered the system from August 3.
Many Kenyans in the Gulf kingdom work as housekeepers, cleaners, drivers, security guards, and casual laborers. The new labor policies have slowed inflows from Saudi Arabia, with diaspora remittances from that corridor yet to recover by August. Monthly cash wired home from Saudi Arabia was above $28 million between January and July 2025, peaking at $37.23 million in March, but then fell to $16.30 million in August and remained below $19 million for the rest of last year.
The decline in remittances from Saudi Arabia continued into 2026, with the monthly flows falling to $11.89 million in June before dropping further in August. In contrast, Tanzania recorded a sustained increase, with August inflows more than double the $5.25 million recorded in June 2025 and 72.3 percent above the level a year earlier. This significant increase has enabled Tanzania to surpass Saudi Arabia as a source of diaspora cash for Kenyans.
The shift in August is significant because the Gulf kingdom had historically been a much larger source of diaspora cash, beating the UK to become the second-biggest corridor after the US in 2023 and 2024. Between July 2024 and June 2025, Kenyans working in Saudi Arabia sent about $390.6 million home, compared with about $68.6 million from Tanzania. However, over the following 12 months to June 2026, the diaspora inflows from Saudi Arabia fell to about $198.1 million, while Tanzania increased to about $90.3 million.
The US remained the biggest source of diaspora cash for Kenyans, despite a 15.4 percent year-on-year fall in August to $205.22 million. Other markets recorded strong increases, with Australia rising 53 percent to $30.23 million, Canada increasing 52 percent to $20.69 million, and the United Arab Emirates jumping nearly 70 percent to $17.44 million. The United Kingdom rose 25 percent to $38.82 million, while Germany increased 17 percent to $17.51 million.
Total remittances rose 6.03 percent to $451.85 million in August from $426.13 million a year earlier, showing that stronger flows from other diaspora markets are cushioning declines in the US and Saudi Arabia. CBK Governor Kamau Thugge said in February that changes in labor policies in Saudi Arabia had slowed inflows, although he expected the disruption to be temporary. The latest figures indicate that the disruption is yet to recover, but other markets are filling the gap.
Key points
- Kenyans living in Tanzania sent $11.72 million home in August, surpassing the $11.61 million sent from Saudi Arabia.
- The new labor policies in Saudi Arabia have slowed inflows from the Gulf kingdom, with diaspora remittances yet to recover by August.
- Total remittances rose 6.03 percent to $451.85 million in August, driven by stronger flows from other diaspora markets.
