The amount of money sent home by Kenyans living and working in the United States dropped by nearly Sh22 billion in the first half of 2026, as the fallout from President Donald Trump’s tax policies and the economic shocks of the Iran conflict took its toll.
New Central Bank of Kenya (CBK) data shows remittances from the US fell 12.6 percent to $1.178 billion (Sh152.50 billion) in the six months to June 2026, down from $1.348 billion (Sh174.50 billion) a year earlier.
This was the sharpest decline since Kenya began publishing remittance data by country.
The decline wiped out $169.5 million (Sh21.94 billion) from Kenya’s biggest source of diaspora cash and pushed US inflows to their lowest first-half level since 2021.
The US fall was more than twice the $76.4 million (Sh9.9 billion) decline recorded in Kenya’s total diaspora remittances, underlining America’s outsized role in the first-half contraction.
This means the US accounted for more than the entire drop in remittances, with stronger inflows from other countries such as the UAE, the UK and Australia cushioning what would otherwise have been a much steeper decline in money sent home.
The double-digit retreat pushed America’s share of Kenya’s total remittances to 48.24 percent from 53.51 percent a year earlier, taking its contribution below the 50 percent mark for the first time in the seven years since the CBK started making such data public in 2019.
The US had accounted for between 50.74 percent and 58.63 percent of Kenya’s first-half diaspora earnings in each of the previous six years, with its share peaking at 58.63 percent in 2022.
Overall diaspora remittances fell 3.03 percent to $2.442 billion (Sh315.75 billion) in the six months to June from $2.518 billion (Sh325.58 billion) a year earlier.
The decline marked the sharpest January-to-June contraction since the aftermath of the 2008 global financial crisis, when widespread job losses across advanced economies cut remittances to Kenya by 11.4 percent in 2009.
The latest slowdown came in the wake of the Iran war, which disrupted economic activity across the Gulf countries such as Saudi Arabia, where thousands of Kenyans work, while fuelling inflation and slowing growth in major economies like the US.
The slide also coincided with the introduction of a one percent US tax on money sent abroad and tighter labour policies in Saudi Arabia, adding pressure to two important sources of Kenya’s diaspora earnings.
The new US levy took effect on January 1, raising the cost of transferring money for millions of migrants, including Kenyans working in America.
Before the tax took effect, Shem Ochuodho, global chairman of the Kenya Diaspora Alliance and president of the Africa Diaspora Alliance, warned that higher transfer costs could push some Kenyans towards alternative channels.
“This may push the Kenyan diaspora in the US to alternative channels. Remember tax evasion is illegal, but tax avoidance is not,” he said.
“So some people will likely move to cryptocurrencies—and the world is moving towards that direction.”
The first-half figures show the deterioration accelerated as the year progressed, suggesting global shocks intensified after the conflict in the Middle East deepened.
Remittances initially appeared resilient, rising 3.4 percent to $1.274 billion (about Sh164.92 billion) in the first quarter, supported by stronger inflows in February and March.
However, the gains were wiped out between April and June, when diaspora inflows fell 9.2 percent to $1.168 billion (Sh151.20 billion), erasing $118.2 million (Sh15.30 billion) in money sent home.
Monthly data shows remittances fell 5.9 percent in April, 10.4 percent in May and 11.2 percent in June, making the final month the weakest of the year.
The CBK said the unresolved Middle East conflict disrupted global supply chains and pushed up transport costs, resulting in higher inflation and slower global growth.
Inflation in the US rose from 2.4 percent in February to 3.3 percent in March and 3.8 percent in April before climbing to 4.2 percent in May.
The May reading was the highest since April 2023, when the world was battling global supply chain bottlenecks. Inflation later eased to 3.5 percent in June.
For Kenyans in America, rising living costs reduced the cash available for family support, and the new transfer tax increased the cost of sending money home, creating a double squeeze.
The combination has raised questions over whether the decline reflects reduced diaspora earnings, higher remittance costs or a possible shift towards alternative channels outside those tracked by the CBK.
The apex bank has cut its forecast for remittance growth this year to 0.7 percent from an earlier projection of 1.5 percent following the weaker-than-expected first-half performance.
“Assuming a de-escalation in conflict in the Middle East, we expect an improvement in performance of remittances in the second half of the year,” CBK Governor Kamau Thugge said on August 12.
“We had to revise this downwards. Initially, we had growth of 1.5 percent, but given the performance of remittances so far — the 12 months to June but also the first six months of this year — we felt it wise to revise downwards the growth of remittances this year.”
Dr Thugge said the 0.7 percent projection could represent one of the slowest periods of remittance growth Kenya has experienced in a long time.
