(NAIROBI) – Kenyan commercial banks are transporting increasing amounts of physical cash to countries abroad, with South Sudan ranking alongside the United Kingdom and United States as one of the top recipients. The trend highlights the growing importance of South Sudan in the region’s financial ecosystem.
According to a new report titled Survey on Cross-Border Movement of Cash, 15 out of Kenya’s 38 licensed commercial banks, representing nearly 40%, are actively involved in international physical cash transfers. The report, released by Kenyan financial authorities and backed by the Central Bank of Kenya (CBK), sheds light on the growing complexity and volume of these cross border transactions.
The CBK states that the main reason for these transfers is to ensure liquidity and operational efficiency for foreign subsidiaries, which often operate in countries with volatile or limited access to cash.
The cash comes primarily from customer deposits held in Kenyan branches, but other sources include banking subsidiaries, foreign currency exchange bureaus and the central banks of other nations.
The United Kingdom emerged as the largest destination, accounting for 42% of all physical cash outflows from Kenya. It is followed by the United States at 15%, South Sudan also at 15%, Switzerland at 12%, and Germany at 4%.
| Destination | Share of Kenyan Cash Shipments |
|---|---|
| United Kingdom | 42% |
| United States | 15% |
| South Sudan | 15% |
| Switzerland | 12% |
| Germany | 4% |
| DRC | 8% |
In monetary terms, if a bank were to move KSh 460 million (approx. $3.3 million), then roughly KSh 69 million (about $500,000) would be destined for South Sudan. These figures illustrate South Sudan’s prominence in the network of financial flows from Kenya, underscoring strong cross border banking relationships.
South Sudan’s 15% share positions it ahead of several more established economies in terms of cash movements. Analysts believe this reflects both growing financial ties between Nairobi and Juba and the operational needs of Kenyan banks with branches or business links in South Sudan, where banking infrastructure remains under development.
The movement of physical cash largely involves dominant global currencies, notably the US dollar, British pound and euro. The US dollar is the most frequently shipped currency, confirming its continuing role as the world’s principal medium for financial transactions.
Kenya’s financial regulators have stressed that all such transfers are conducted within strict regulatory guidelines. These include comprehensive anti-money laundering (AML) measures and know-your-customer (KYC) policies, designed to prevent the misuse of cross border currency flows.
Even with these controls, the increase in physical cash exports has led to renewed scrutiny. There are rising calls from global watchdogs for enhanced monitoring and greater transparency in order to address the risk of illicit financial flows, which remain a concern in the region.
The UK’s position at the top of the list is attributed to its long standing economic ties with Kenya. British institutions host accounts for many Kenyan businesses and government bodies. In 2022, the UK was Kenya’s fifth largest export destination and the largest foreign investor in the country, accounting for 14% of Kenya’s foreign liabilities, according to the UK’s Foreign, Commonwealth and Development Office.
South Sudan’s inclusion among the top cash destinations is particularly significant for observers focused on regional integration and economic cooperation in East Africa. With ongoing infrastructure and development projects in South Sudan, the movement of cash from Nairobi may be supporting expanding trade, investment and humanitarian operations across the border.
The Democratic Republic of Congo (DRC), another regional player, received 8% of Kenya’s cash exports.
Kenyan banks continue to play a crucial role in supporting operations in neighbouring countries, including those facing liquidity or infrastructure challenges. This is especially relevant for South Sudan, where the banking sector is still evolving in a post conflict environment. With $1 equal to around 4,600 South Sudanese Pounds (SSP), the value of foreign cash imports is highly significant in local terms, potentially aiding stability and commerce.
