Recent developments are spurring a two-wheeler transportation movement. Prior to the developments, you could go a whole day without seeing a motorbike on Kenya’s roads, but that is no longer the case, writes John Msingo, the East African Moderator for AfricaNEV.
How did the change in modes of transportation come about? How is it that now, as I am writing this article in a café, I can hear one and I am very sure that you cannot go more than 150 metres in Nairobi without seeing one.
The genesis was a bill that zero-rated boda bodas of up to 250cc in 2008, by the Kibaki government. Before that in 2007, the registered number of motorcycles in 2005 was 3,759. After this bill, the registered number grew to 91,151 in 2009. Talk about exponential growth.
This growth gave birth to a whole new industry. There are varying reported numbers from 1.2, 1.4 to even 1.5 million people working directly in or related to the boda boda industry (Boda Bodas are bicycles and motorcycle taxis commonly found in East Africa, according to Wikipedia). Yes, that’s right, at least more than a million people earn their daily bread from this sector. Currently, there are eight motorcycle assembly plants spread across the country, in addition to increasing the amount of people that this new industry employs.
Further down the value chain, numerous companies that financethese assets have been formed and all these people are directly employed by the sector .
The effect of this industry is not only in terms of employment, numerous parts of the country, which were inaccessible, have now been opened up due to this mode of transport.
Almost everyone in Kenya’s major cities has that ‘boda guy’ back home. These guys make everything move from building materials for construction sites, food products for the market to lifting people from the bus stop and dropping them at hard-to-reach places.
The impact that this industry has had on the Kenyan economy is indisputable.
Quantifying that impact in numbers, a study undertaken by one of the motorcycle assemblers found that boda boda drivers earn about one billion – yes Ksh1 billion – a day (about $7 million). This is roughly equivalent to 3.4% of Kenya’s GDP in 2022. They buy around Ksh300 million ($2.1 million) worth of fuel a day, which equates to about Ksh60 billion ($420 million) annually collected by the Kenya Revenue Authority (KRA) from taxes.
About 75% of the riders are youths who earn about Ksh1,000 ($7) a day from 15 rides. This is truly an industry that has touched every facet of the economy.
In May 2023, one motor vehicle supplier informed the public that motorcycle sales had dropped by 58%. Many factors contribute to this, the major one being – in my opinion – the rising cost of fuel. The cost of fuel in May 2022 was Ksh147.86 a litre (about $1.04). In May 2023, the cost rose to KSh182.70 a litre (roughly $1.28). – An increase that is more than many can afford.
More than one million boda boda riders are finding it hard to survive. Most of the bikes are financed by micro-finances which require payment usually between $4 to $6 daily and if you cannot make ends meet, what can you do?
Here’s an option; I have a boda guy just like every Kenyan. My boda guy is Richard who has been in the business for more than five years and is what you call a veteran. He has built his home and has bought a pro-box just from working on boda bodas (I found out all of this from the numerous deliveries and trips he has taken me on.)
Richard got a new bike which has been operating for five months. Recently the police confiscated his bike, and he left it with them for more than a week. He reverted to an older bike and used it for one week. Only a week. He got his new bike from the police station and he is now back on the road and is very happy.
What I have not told you is that Richard’s new bike is electric and this is the reason he is my boda guy. Now, obviously, I am very biased. But there is nothing as satisfying as seeing the change that you advocate for is actually changing lives.
Richard went back to a normal bike and found it did not make sense to him. I want that message to sink in.
As far as this goes, the Kenyan president recently said that Kenya imports fuel at a cost of $500 million a month. All those US dollars leave our shores and go to other economies. What would happen if a fraction of this remained in the country? We are currently reeling from a shortage of foreign exchange that affects every single commodity that is imported.
Something else that is imported – normal motorbikes. The eight assemblers mentioned above bring in CKDs (complete knock down kits) that are assembled here in Kenya. Several electric bike companies in the country are in various stages of research and development (R&D) with the aim to fully manufacture bikes here.
Whole new LOCAL value chains can be created to supply this new industry, which received a boost when the president recently announced that some incentives are planned to help encourage growth in this sector.
Mr President, we at the Electric Mobility Association of Kenya (EMAK) are looking forward to those incentives and we cannot wait to help you build your legacy both locally – like former President Kibaki – and internationally by taking a leading role in combating climate change like another hero, Tomas Sankara former President of Burkina Faso.
By just removing VAT on motorbikes back in 2008, birthed this new industry. We can do the same for e-mobility!
About the author
John Msingo is the East African moderator for AfricaNEV, a non-profit organisation to accelerate the adoption of e-mobility on the continent through capacity building, policy advocacy, creating awareness and linking stakeholders. Msingo is also on the steering committee of the Electric Mobility Association of Kenya (EMAK).
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