NAIROBI, Kenya — Kenya’s remittances from Saudi Arabia have plunged to their lowest level in four years after the Gulf kingdom rolled out a new skills-based work permit system that has disrupted employment and wages for thousands of Kenyan workers.
Data from the Central Bank of Kenya (CBK) shows money sent home from Kenyans in Saudi Arabia dropped to $16.3 million (Sh2.11 billion) in August and $16.85 million (Sh2.18 billion) in September — nearly half the monthly average earlier this year.
The two-month total represents a 46.8 per cent decline from the $31.17 million (Sh4.03 billion) average recorded between January and July, pulling inflows down to levels last seen in 2021.
Saudi Arabia, which until recently was Kenya’s fastest-growing remittance corridor, has seen the sharpest fall since the CBK began publishing country-level data in 2020.
Work permit overhaul hits low-skilled workers
The drop follows the kingdom’s rollout of a skills-based work permit system in mid-2025, replacing the decades-old iqama residency model that treated all foreign workers equally regardless of qualification or role.
Under the new framework, which took effect in phases from July, migrant workers are classified into three skill tiers — highly skilled, skilled, and basic — based on education, experience, technical ability, and wages.
Highly skilled workers such as doctors, engineers and executives must have at least a bachelor’s degree and five years of experience, while skilled workers include technicians and supervisors with vocational training.
The basic tier — which covers most Kenyan domestic and manual labourers — requires no formal education but is capped at workers under 60 years.
The shift has disrupted contract renewals, onboarding, and salary payments, slowing down cash transfers to families back home.
UK overtakes Saudi as second-largest source
Remittances from Saudi Arabia in the first nine months of 2025 stood at $251.3 million (Sh32.48 billion), down 16.9 per cent from $302.4 million (Sh39.08 billion) in the same period last year.
This contraction — the first on record — has allowed the United Kingdom to overtake Saudi Arabia as Kenya’s second-largest remittance source, with inflows of $262.5 million (Sh33.9 billion) between January and September.
Saudi Arabia had previously powered Kenya’s remittance growth, rising from $88.3 million in 2020 to over $300 million in 2024, driven by formalised labour export deals and rising Gulf wages.
Ruto’s labour export ambition faces test
President William Ruto has made overseas employment a key part of his foreign policy, targeting the deployment of 250,000 Kenyan workers annually to boost foreign exchange inflows.
“It is my intention that every year we should be able to send 250,000 Kenyans to work in different parts of the world so that we can enhance and increase our remittances from abroad,” he said in May 2024.
However, the Saudi reforms pose a major hurdle to that goal, given that a large share of Kenyan workers in the kingdom fall into the low-skilled category most affected by the new rules.
US remittances cushion the dip
The decline from Saudi Arabia has been partially offset by stronger inflows from the United States, where Kenyans sent home $2.05 billion (Sh264.9 billion) in the first nine months of 2025 — a 5.7 per cent rise from the previous year.
Overall, Kenya’s diaspora remittances rose 3.7 per cent to $3.77 billion (Sh487.2 billion) between January and September, up from $3.64 billion (Sh470.4 billion) in the same period in 2024, thanks largely to steady US flows.
