The Central Bank of Kenya Governor, Kamau Thugge, has attributed the decline in Kenyan diaspora remittances from Saudi Arabia to changes in the country's labour laws. The reforms prioritize skilled workers over semi-skilled labour, reducing the number of Kenyan workers in Saudi Arabia. This development has impacted the amount of money sent home by Kenyans working in Saudi Arabia.
According to data from the Central Bank of Kenya, remittances from Saudi Arabia dropped by more than half in the first nine months of 2026, falling to about $121.5 million from $251.3 million in the same period last year. This significant decline has contributed to a slight fall in overall diaspora remittances, which stood at approximately $3.77 billion between January and September.
The decline in remittances from Saudi Arabia has been partly offset by gains from other regions. However, inflows from North America, which accounts for the largest share of Kenya's remittances, also weakened during the period. This slowdown follows a record year in 2025, when Kenyans abroad sent home about $5 billion, representing annual growth of 1.9 percent.
Diaspora remittances are a crucial source of foreign exchange for Kenya, supporting household spending and helping finance the country's external payments. The Central Bank of Kenya Governor made these remarks during an engagement with the National Assembly Departmental Committee on Finance and National Planning in Machakos.
The committee session was held to discuss monetary developments and the domestic economy. Although Thugge did not provide figures on the number of Kenyan workers affected by Saudi Arabia's labour reforms, it is clear that the changes have had a significant impact on Kenyan workers in the country.
The Kenyan diaspora remittances play a vital role in the country's economy. The government and the Central Bank of Kenya will likely be monitoring the situation closely to mitigate the effects of the decline in remittances and to identify new opportunities for Kenyan workers abroad.
The effects of Saudi Arabia's labour reforms on Kenyan workers and the country's economy will continue to be felt in the coming months. The situation may lead to a shift in the countries where Kenyan workers choose to seek employment, potentially affecting remittances from other regions.
Key points
- Changes in Saudi Arabia's labour laws have led to a decline in Kenyan workers, affecting diaspora remittances.
- Remittances from Saudi Arabia dropped by more than half in the first nine months of 2026.
- Diaspora remittances are a crucial source of foreign exchange for Kenya, supporting household spending and helping finance the country's external payments.
