Central Bank of Kenya (CBK) is looking at developing a framework that will offer special incentives to Kenyans abroad who set up businesses back at a home.
Governor Patrick Njoroge says the findings of a survey the bank ran on Kenyan diaspora and recipients locally will inform the development of a facilitative policy that encourages increased targeted direct investment flows by citizens living and working abroad.
CBK partnered with the Foreign Affairs ministry and Kenya National Bureau of Statistics in conducting a poll on the diaspora between January and March 2021.
“There are all sorts of ways that the Kenyans out there could be supportive (to economic development), not just making investments in government securities and other assets like equities,” Dr Njoroge said. “They can set up shops here; they can have direct investments … as has happened in other countries like India, not just portfolio investments.”
Kenya Diaspora Alliance (KDA) says about three-quarters of remittances, however, go into family support such as school fees and medical bills.
Shem Ochuodho, the KDA global chair, insists this could be reversed in favour of direct investments if the citizens abroad were offered incentives such as tax rebates.