- Investors root for local assembly to create more jobs
- Boda boda sales decline as industry experiences growing pains
- Two-wheelers have become a popular mode of transport around the country
?The sales of motorcycles in Kenya has been on a decline this year, negating a sharp rise witnessed last year and pointing to a possible plateauing of the industry as the number of motorbikes reaches saturation point.
It is also a probable indicator that investors will now focus on the lucrative trade in spare parts even as the government makes attempts to streamline the sector that has become a critical means of transport and a key source of livelihood for many.
Motorcycle dealers sold 105,000 units between January and July this year, an 11 per cent dip compared to 118,000 units over a similar period last year, according to latest data by the Kenya National Bureau of Statistics (KNBS).
Though sales have moved up and down over the last five years, there was a sharp rise last year. The number of units registered in 2017, according to KNBS, grew 55 per cent and reached 191,601, compared to 123,539 in 2016.
Despite the dip witnessed in the first seven months of this year, investors are hopeful that against the odds, they will match last year’s performance.
Motorcycle Assemblers Association of Kenya (MAAK) chairman Isaac Kalua said the industry has experienced growth over the second half of the year.
“A lot of the purchases have taken place since July. The market might post the same numbers as last year or even higher. To me it looks the same or even a little higher,” he said.
Among the factors that he expects to drive growth include better economic conditions as well as the boda boda industry gaining more currency as public transportation.
“There is more movement with the motorcycles. It is also getting safer, accidents are reducing as awareness grows and people now believe that it is a good source of income,” said Mr Kalua.
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“Institutions such as banks and insurance companies have warmed up to the industry, making it more affordable and easier for people to acquire motorcycles.”
According to data by the association, there are about 800,000 motorbikes of which 100,000 are used by courier companies and another 100,000 by personal bikers.
The balance of about 600,000 is used in public transport as boda bodas.
MAAK estimates that in a day, the boda bodas can do 22 million rides and generate Sh900 million, with each rider making Sh1,500 on average.
According to the Kenya Economic Survey 2018, the motorcycle industry (sales and repairs), together with wholesale and retail trade and motor vehicle repairs, were among the biggest creators of jobs last year.
They accounted for 10 per cent of people that are gainfully employed in the economy.
“Wholesale and retail trade and repair of motor vehicles and motorcycles contributed the highest wage employment with a share of 15.5, 14.8 and 13.4 per cent of total private sector employment, respectively,” said KNBS in the survey.
Kalua said that while the industry has been demonised, it is a critical mode of transport that is filling gaps occasioned by a broken down public transport, adding that legislation specific to the industry can help streamline it.
Local assembly and spare part production can also be key in growing manufacturing, he said. “It is a major creator of jobs. One motorbike can support up to eight people who include the riders and mechanics, among other players in that chain,” said Kalua.
“If there was a mass transport system, there would be need for a boda boda. There is also no lower hanging fruit for the government’s Big Four Agenda than the motor cycle assembling industry.”
Stakeholders have previously voiced concerns about the lack of policy direction from the Ministry of Transport. Other than the crackdown on the illegal operators, analysts have said the Government should consider giving incentives for local assembly plants so as to reduce the number of imports, some of which are substandard.
There is, however, progress in coming up with a framework on governing the largely informal and chaotic industry. The ministries of Transport and Interior have formed a taskforce that will develop a policy for governing the industry.
“The law is not exclusive to one group. They (motorcycle riders) must obey the law. We shall be very hard,” said Transport Cabinet Secretary James Macharia.
The 12-member taskforce has been given two months to report back to the ministries with recommendations on legal and administrative measures that should be undertaken to enhance safety and order within the industry.
“We want to make sure that the people who remain in the public transport sector are law abiding, willing to do business in lawful ways and need the support of their government so that their businesses can thrive,” said Interior Cabinet Secretary Fred Matiangi.