The United Kingdom has reclaimed its position as Kenya’s second-largest source of diaspora remittances, overtaking Saudi Arabia as shifting labour policies and rising transfer costs in the Gulf disrupt earnings for thousands of Kenyan workers.
New data from the Central Bank of Kenya (CBK) shows remittances from the UK rose marginally by 0.72% to $360.2 million (Sh46.47 billion) in 2025, edging past inflows from Saudi Arabia, which fell sharply by 25.06% to $302.1 million (Sh38.97 billion).
The reversal ends a two-year period in which Saudi Arabia ranked ahead of the UK.
The UK hosts an estimated 144 000 to 200 000 Kenyans, many of whom work in healthcare, logistics, hospitality, and professional services.
Their remittances form a critical pillar of Kenya’s economy, supporting household consumption, education, healthcare and small businesses, while also providing a vital source of foreign exchange that often rivals earnings from tourism and agriculture.
By contrast, Saudi Arabia’s Kenyan population, largely employed in domestic work, construction and security, has been hit by labour market reforms and higher remittance costs.
The introduction of a 15% value-added tax on remittance service fees has made formal money transfers more expensive, altering how workers send money home.
“The cost of sending money from Saudi Arabia has recently increased,” the Kenya Diaspora Alliance said in a statement. “As a result, many Kenyans are holding onto their cash in the kingdom or turning to informal channels rather than sending it through official systems.”
Saudi Arabia’s new skill-based work permit regime has also affected wages and contract stability, particularly for low-skilled workers who make up the bulk of Kenyan migrants in the Gulf.
CBK figures show average monthly inflows from Saudi Arabia dropped to $25.17 million in 2025, down from $33.59 million a year earlier.
For Kenya, the resilience of UK remittances demonstrates the importance of diversified diaspora markets. As CBK Governor Kamau Thugge has previously stated, diaspora inflows remain “a key buffer for the balance of payments,” helping cushion the shilling and sustain livelihoods across the country.
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