In 2013 alone Kenya received remittances worth Sh10 billion, an eight per cent increase from the previous year. The money forms about three per cent of GDP.
Given the high cost of living abroad, it is estimated that this forms about 30 per cent of their income, thus the money made is anything between Sh300 billion and Sh500 billion per year.
Yet these Kenyans have had tough times. During the 2009 economic recession growth in remittances slowed down significantly. The country managed to get about Sh52 billion. This is coupled with the struggle against discrimination, stiff competition for jobs with locals from schools considered superior, and in some cases unfair treatment.
One wonders how this money affects the local business environment? First, any extra money coming into the economy makes a change as it can be multiplied many times over if properly invested.
The money increases our GDP and capital base. Additionally, the foreign exchange strengthens our currency by creating demand for it internationally.
Traditionally, Kenyans abroad invest their money in property. This is partly because the property, if developed, can generate income with little or no supervision.
Secondly, property is stored value that has a tendency to appreciate as opposed to many other investments. A few others have invested in the stock market. This move has contributed to the prevailing asset bubble in the local real estate scene.
Yet the business scene remains idle and untapped by Kenyans in the diaspora. Sh100 billion invested in real estate may create good business for companies in the construction sector and create a few jobs. However, the real impact by the diaspora is through venture capital or seed funding.
While banks have shied away from venture capitalism and the few in the market do not have much capacity, the opportunity remains open and the problem unsolved.
Renaissance Europe did not become powerful through individual investments. Individuals pooled resources tapping new opportunities and solving problems both in Europe and beyond. These are the groups that formed the British East African Company, British India Company etc.
For our brothers and sisters abroad to think that their individual investments in houses and plots will help the country move forward is naive. There is urgent need to pool resources, fund creative business ideas, take some risks and make real money.
There are many opportunities in Konza, Isiolo, Dongo Kundu, fertiliser factories among others. Kenyans in the diaspora should organise themselves and become the first port of call for any investment opportunity.
Odhiambo is the managing consultant at Elim Consulting. www.elim-consult.com