State Capacity, Diaspora Capital, and Bilateral Trade: Reassessing Kenya–Australia Economic Relations
The continued pressure on the Kenyan government regarding the state of the economy, the increased demand for answers, and the need for a sincere economic trajectory have set off a wave of papers attempting to determine what should be done. It mirrors the seminal writing of Vladimir Lenin, who once asked in a publication, “What must be done?” The Kenyan state has continued to experience increased unemployment rates, high multidimensional poverty levels, a high budget deficit, elevated public debt with fears of default, an unpredictable tax regime, and a frustrated youth population that has now taken to the streets in significant numbers. Notably, this is the first time protests have emerged primarily for economic reasons. This marks a shift in trajectory, as previous protests were largely politically motivated.
It has become clear that the economy must now consider new potential markets for exports, foreign direct investment, structured bilateral relations, and the establishment of centres of research and advocacy for the client state. This paper therefore makes the case for Kenya– Australia relations. The truth is that, for far too long, a lack of focused attention and the overlooking of potential opportunities can be blamed, yet available data continues to show untapped capacity. Kenya experienced high GDP growth rates in the early 2000s, although the commodity boom must be factored in. The years beyond the 2010s have been fluctuated by scattered moments of promise, from the Turkana oil discovery that never materialised economically despite the hype, to foreign debt accumulation, particularly from China, which has contributed to a Dutch disease effect that has limited exploration and development of other areas of economic potential.
Kenya–Australia Relations: Historical and Diplomatic Context
Kenya has experienced good relationships with other countries across the globe despite the Cold War, as the Kenyan government remained non-aligned, though with evidently closer relations to the West, especially after the Kenya People’s Union party of 1964, which had communist characteristics. Kenya’s relationship with Australia began in 1965 with Australia recognizing Kenya as an independent state, followed by the appointment of the first Australian ambassador to Kenya and Tom Mboya’s official visit to Australia. These events marked the initial stages of the relationship, which has continued to grow since then. Since the establishment of the Kenya High Commission in Canberra in 1984, Kenya has appointed at least twelve High Commissioners to Australia, and Australia has appointed over twenty High Commissioners former presidents have also visited Australia, including Daniel Arap Moi in 1981 and Mwai Kibaki in 2011.
These relations marked sixty years and were celebrated this year in New South Wales, Victoria, Queensland, the Australian Capital Territory, and Western Australia, with the latter two being honoured by the presence of the Principal Secretary for Diaspora Affairs. Beyond the celebrations, one question remained insufficiently addressed, namely the state of trade and commercial relations between the two countries. The author therefore questions the existing gap within the overall relations between Australia and Kenya.
Trade, Demographics, and Economic Opportunity
In analysing the trade relations, it is noted that there were earlier interests in developing structured trade pathways between the two countries. Over time, however, these relations have deteriorated, and current trade activity has largely been driven by the private sector. The embassy has been left primarily with administrative functions, which has come at the expense of trade and commercial progression.
Recent demographic estimates indicate that Australia is now home to a growing Kenyan community, commonly placed between 22,000 and 35,000 people (Australian Bureau of Statistics, 2021; SBS Cultural Atlas, 2022). While the upper estimate is considered speculative, the lower range is supported by available census reporting. Migration trends show that the most significant surge occurred between 2016 and 2020, driven largely by education pathways and skilled migration programs. This momentum slowed during the COVID-19 period and resumed shortly after, with post-pandemic enrolment data and remittance patterns reflecting renewed growth (Kenyans in Australia, 2023; Family Remittances, 2024).
Although earlier Kenyan arrivals can be traced to pre-2010 migration, the largest proportion of Kenyan residents in Australia today are first-generation, relatively young, and highly educated. This profile positions the Kenyan population as a strategically valuable segment within Australia’s international education market, estimated to account for more than 10,000 students and recent graduates across states and territories. For Australia, this represents an economically viable, long-term talent pool, and for Kenya, it reflects a diaspora with sustained cultural ties and economic influence.
The Kenyan Australian community is distributed across several states, with significant concentrations in Western Australia (28.4%), Victoria (23.0%), New South Wales (18.8%) and Queensland (15.3%), reflecting diverse settlement patterns in major urban and regional centres. These settlement patterns align closely with availability of skilled employment, university presence, and affordability trends, which continue to shape incoming migration pathways.
Crucially, this demographic shift has translated into measurable economic outcomes. Recent remittance trends show Australia surpassing traditional destinations such as Germany and other European markets, becoming one of the fastest-rising remittance sources per capita in the Kenyan diaspora (Kenyans in Australia, 2025; Family Remittances, 2024). Per data shared by the Central Bank of Kenya, Australia’s per-capita remittance levels are now among the highest globally, with projections of continued growth. Economically, this positions Australia as a critical consideration for Kenya’s international labour and skills strategy, aligning directly with the Kazi Majuu framework of the Kenyan government. As Chege (2025) notes, rising disposable incomes among the diaspora have also contributed to increased property investment and rental demand, a trend consistent with remittance-driven economies in other jurisdictions.
Today, remittances constitute Kenya’s largest source of foreign exchange, surpassing traditional export earners such as tea and coffee, and the Australian corridor is becoming a notable contributor to that shift.
Economic Statement on Australia–Kenya Trade (2024)- Department of Foreign affairs and Trade (Australia government)
DFAT-adjusted ABS figures show:
- Australia’s exports to Kenya: AUD $870.8 milliono Education-related travel: $705.0M (81%)
LPG / energy: $32.3M
Wheat: $23.3M
Vehicles & manufactured goods: $15.3M
- Australia’s imports from Kenya: AUD $148.2 million
Recreational travel: $65.0M
Agriculture, including coffee and tea: $18.2M+
-Australia ranks:
41st as an export destination for Kenya,
42nd as a source of imports.
Investment stocks:
$35M Australian investment in Kenya,
$14M Kenyan investment in Australia (ABS, 2024).
These demographic and economic patterns create a clear rationale for strengthening Kenya– Australia engagement, particularly in matters of trade, commerce, and strategic cooperation. In the author’s view, the current numbers present an identifiable market opportunity worth structured investment and policy attention. The subsequent section of this paper will therefore highlight the gaps, constraints, and administrative shortcomings that have limited the effectiveness of Kenya’s governmental approach in expanding these relations.
This paper also advances the case for the urgent establishment of a Centre for Kenya–Australia Relations, focused on advocacy, research, and economic facilitation. Such a centre could initially be piloted under Kenya Community NSW, the foremost recognised Kenyan association in New South Wales, given its existing involvement in policy submissions, stakeholder engagements, and diaspora coordination. In its concluding chapters, the paper will also provide advisory insights for Kenyan businesses seeking to enter or expand within the Kenyan Australian diaspora market, informed by lived experience and the author’s capacity as President of Kenya Community NSW.
Gaps, constraints and administrative shortcomings – The role of the Kenyan Government.
The trust entrusted upon any government is to help its citizenry realise their dreams, aspirations, and protection. It is expected that the government shall make it easier for the people to gain access to new markets, capital, a fair taxation system, and ensure property rights within a capitalist economy. In extension, the government, through its offices and representatives, is expected to do everything within its own power to ensure the advancement of relations between the Kenyan state and Australia as far as trade and commerce are concerned.
We are, again, at a time when state fragility is an actual threat, as defined by a high-level United States task force as the absence or breakdown of a social contract between people and theirgovernment, characterised by deficits in institutional capacity and political legitimacy and, consequently, risking instability and violent conflict. It is, by all standards, therefore urgent that we identify how the Kenyan government has failed in the advancement of these relations, with the hope that by addressing these issues we can shed light on the bottlenecks that continue to threaten the progress of our economy.
A - The memorandum of 2023
The 2023 Memorandum of Understanding, whose full details are not publicly available through accredited or official government sources, has nonetheless been cited as a progressive marker in the evolution of Kenya–Australia relations. This trajectory was further reinforced by the official visit to Kenya on 12 October 2025 by Australia’s Assistant Minister for Foreign Affairs and Trade and Assistant Minister for Immigration, Matt White. During the visit, both parties reaffirmed sixty years of diplomatic relations and signalled intent to deepen cooperation across sectors outlined in the bilateral framework, including trade and investment, health, education, science, security, climate change, and multilateral engagement. Economic ties were highlighted as expanding, with two-way trade surpassing AUD 1 billion in 2024, driven largely by education services, mining, agribusiness, healthcare, digital technology, and tourism.
Whereas this step is appreciated as a sign of progressive relations, there remain significant questions regarding the frameworks required to realise the stated objectives. Considering that the contents of the memorandum are not publicly available, the author leaves its substantive assessment open, but notes that there has been no notable progress arising from the memorandum to date. At the time of writing, the memorandum remains a political document which, while potentially significant, has yet to translate into observable outcomes and its potential remains unrealised.
The author further notes that a high-level diplomatic meeting took place in Canberra last year between the two countries; however, in the absence of publicly available details or communicated outcomes, it would be inappropriate to comment substantively on the discussions. Assessment is therefore deferred until such time as progress or measurable outcomes emerge that directly address the bottlenecks identified in this report.
B - Matters Raised by the Joint Submission of Vitti Capital, AAAC, and Western Sydney University to the Committee of the Australian Parliament
The authors of this report formed Submission No. 18, a joint effort by the three organisations, based on an online survey conducted within the Kenyan community and other African entities. The report noted that gaps in Australia–Africa trade can, to a certain extent, be attributed to governmental shortcomings. The submission proceeds to identify areas of concern that align directly with Kenya–Australia bilateral relations.
1 - Poor Marketing by African Representatives and Members of the African Diplomatic Community
The joint report noted that 26% of respondents identified poor marketing as a key barrier. Due to past successes in the mining industry, there appears to be a prevailing assumption within diplomatic and policy circles that this sector sufficiently anchors Australia–Africa economic relations. However, this has resulted in regression in addressing other marketable sectors.
This report acknowledges the strong criticism directed at the diplomatic corps; however, its analysis finds that embassies are heavily overworked. The Kenyan Embassy is at a disadvantagedue to its administrative workload and the additional responsibility of serving other countries that do not have physical consulates in Australia. According to an Australian Government report, at least six countries refer their business to the Kenyan High Commission.
This workload challenge will require long-term planning, strategic intervention, and increased funding. However, in the interim, Kenya cannot afford further deterioration in trade and commercial engagement.
In the Kenyan case, it is evident that Australia has contributed significantly through tourism. Growth in Australian tourism to Kenya has been noted repeatedly, particularly during the 60- year celebrations in Nairobi, as well as through remarks shared via the Australian High Commission and Kenya High Commission social media platforms. Despite this evidence of an existing market, there have been limited progressive efforts to market Kenya as a top-tier tourist destination.
This raises an important question: if approximately 27,000 Australians travel to Kenya annually without targeted marketing of Kenya’s tourism offerings, what could be achieved if this gap were addressed? The report further implores community members to serve as informal ambassadors for the country. At every engagement, reference to Kenya’s tourism potential should be normalised. Being Kenyan in Australia should not mark the end of the conversation; rather, it should be leveraged to promote increased tourism flows from Australia to Kenya for the broader benefit of the home country.
The Kenyan diplomatic corps is again placed under scrutiny, with a call to accelerate structured tourism marketing initiatives through its offices, through the proposed Centre for Kenya– Australia Relations, or through any other dedicated entity capable of advancing this objective.
2. Unpredictable Tax Regimes, Bureaucracy, and Volatile Economic Conditions
These issues were raised across multiple research questions, and this report consolidates them into a single thematic concern. While Kenya has enjoyed relative stability in parts of its economic history, it has also been characterised by significant uncertainty. One of the most prominent challenges is the unpredictability of tax regimes.
Kenya has struggled to maintain consistency in medium- and long-term fiscal planning. Each financial year, both existing and prospective investors are subjected to uncertainty arising from annual budgetary adjustments and revenue collection measures, which frequently amend tax structures. Customs duties have been particularly affected. Additionally, the cost of sustained political demonstrations and the distortions associated with election cycles have further destabilised the business environment.
With each new administration, contracts are often halted, preferential treatment extended to select competitors, and perceived neutrality during election periods penalised. This environment has encouraged some foreign investors to align themselves with political factions in anticipation of favourable outcomes, undermining fair competition and institutional integrity.
As documented extensively by Joe Khamisi, many investors have bypassed Kenya due to corruption within ministerial offices, high costs of establishing businesses, and the absence of a functional one-stop shop for investment facilitation. Currently, prospective investors must navigate multiple offices to obtain operational certifications, while comparable jurisdictions such as Kigali have significantly streamlined these processes. This divergence has redirected investment flows toward Rwanda.
It is also important to acknowledge that informal costs, often in the form of corruption, are incurred at multiple stages of administrative engagement. The proposed Centre for Kenya– Australia Relations should prioritise lobbying for the immediate implementation of a one-stop shop for investors. While broader structural reforms will require time, particularly given macroeconomic pressures such as high public debt and currency volatility, the establishment of a one-stop shop would represent a meaningful and credible step toward restoring investor confidence.
3 - Harmonising the Community, the Kenyan Government Through the Embassy, and the Australian Government
In their joint report, Fredrick Chege (Vitti Capital & AAAC), Noel Zihabamwe (AAAC), and A/Prof. Hassan Fereidouni (Western Sydney University, School of Business) noted that structured community outreach could strengthen Australia–Africa relations. This report concurs with that assessment. One of the prevailing challenges remains the absence of coordinated engagement between the Government of Australia, the Kenyan community, and the Government of Kenya through the Embassy. Harmonising these relationships will be critical, particularly as the Kenyan community provides exposure to both markets and, in many cases, dual citizens possess the capacity to influence and lobby both governments.
It is evident that community organisations, while active, have predominantly focused on social initiatives. Similarly, the Government of Kenya has pursued its objectives in isolation, without adequately leveraging the diaspora community. Our analysis indicates that members of the Kenyan community who are already active in policy, academia, and trade environments have previously utilised their influence for social-based outcomes. Redirecting that same strategic energy, skill set, and goodwill towards economic and commercial cooperation would yield significantly stronger results for both Kenya and Australia.
4 - Use of the African Continental Free Trade Area
This report also finds that the African Continental Free Trade Area (AfCFTA) can help stimulate greater economic engagement between Australia and Kenya. Kenya has an opportunity to lobby for the full realisation of the AfCFTA to maximise its economic potential. The most significant concerns identified include the need for streamlined taxes, levies, fees, and fair labour practices for any meaningful progress to occur. Kenya, as a strong economic hub within the East and Central African region, can strategically push for these noted reforms. This is not in isolation, as South Africa, Egypt, Zimbabwe, and Mauritius also register high numbers of African immigrants and hold influence within the AfCFTA framework.
Centre for Kenya–Australia Relations
This summarised report makes the case for the urgent establishment of a Centre for Kenya– Australia Relations. Without doubt, the potential of the Kenyan people has been demonstrated through the available data, and it is justifiable for the community to feel a degree of disenfranchisement. The report identifies that, despite limited to no direct government action, diaspora numbers have continued to grow, and community leaders, within their capacity, are lobbying the Australian Government to consider this young, talented, and highly educated population.
This represents potential in waiting, and the earlier all stakeholders engage collectively, the better. The report proposes that the Centre be piloted under Kenya Community NSW and, afteran initial period, operate independently with structured community representation. Its ultimate composition would include NGOs and philanthropic organisations, members of business and industry, community representatives, education, training and research providers, representatives from the Kenyan Embassy, and one representative from Australian trade institutions.