Kenya bets on a remittance rebound to Sh676bn in 2026 — even as a U.S. tax and a Gulf reshuffle pull the other way

The Central Bank of Kenya expects diaspora remittances to grow about 4% to roughly US$5.24B (Sh676B) in 2026, after a soft 2025 dragged down by a 25% drop in inflows from Saudi Arabia, where new VAT on transfer services and sweeping labour reforms disrupted Kenyan workers. The CBK expects the Gulf market to stabilise. The corridor map is shifting too: the UK has overtaken Saudi Arabia as the second-largest source, behind the dominant United States.

The headwind is the U.S. remittance excise tax, with analysts projecting U.S. inflows could dip slightly even with exemptions, and the latest monthly figures already wobbling.

What this means for you: If you send from the U.S. — the source of more than half of Kenya’s inflows — route transfers through tax-exempt bank or card-funded rails to dodge the new levy. If you work in the Gulf, the labour-law churn that hit wages and contracts in 2025 is the real variable; build a buffer rather than assume a smooth recovery, and track whether your employer’s terms have actually stabilised.