Motorcycle imports fell the sharpest last year as higher import costs resulted in a general decline in consumption of goods Kenyan consumers ordered from overseas.
According to the Kenya National Bureau of Statistics data, the number of imported motorcycles and cycles fitted with an auxiliary motor in nine months to September fell by 77.5 percent to 64,041 units from 285,459 units in a similar period in 2022.
The sharp decline in the imports is largely due to increased costs on not only direct acquisitions but also higher financing costs to purchase units, rising fuel costs and a glut of units in the market.
“The main reason for the reduced imports has been cost. We used to buy motorcycles at between Sh135,000 and Sh145,000 and we are now buying the same motorcycle with a 150cc engine at around Sh200,000,” said Kevin Mubadi, founder and national chairman of Boda Boda Safety Association of Kenya.
“The cost of acquisition has also gone up with riders now required to put down a deposit of as much as Sh30,000 by financiers.”
The increased cost of motorcycle imports is largely tied to the depreciation of the Kenya shilling, which shed more than 27 percent last year, making goods ordered from overseas expensive.
The transport sub-sector has moreover seen a glut in the supply of motorcycles with the industry now deemed near the saturation point.
“We now have over 1.8 million riders. A few years ago, we used to have around one million riders. The number of riders is not growing as much as before to warrant new boda boda orders,” said Mr Mubadi.
The decline in the demand for motorcycles is likely to be a setback for the Kenya Kwanza administration, which had been betting on the sector to lead the transition into e-mobility.
Motorcycles have comprised the fastest-growing form of transport with the Treasury estimating two and three-wheeler vehicles to comprise the largest share of the national fleet at 67 percent.
The government’s push to transition the sector into clean energy use has been pegged on reducing pollution from the transport sector.
“To attract investment, the government has developed a compelling package of incentives for serious investors in e-mobility to stake their capital on opportunities in the country’s green growth agenda,” notes the Treasury.
Besides the reduction in motorcycle imports, Kenyan consumers have also marked significant cuts in their consumption of footwear on the back of the elevated costs.
Footwear imports fell by 66.5 percent in the first nine months of 2023 to 1.48 million pairs from 4.42 million pairs over the same period in 2022.
Volumes of imported cement clinkers and automatic data processing machines also declined by more than half over the same period.
However, some goods defied the slow demand trend to register a rise in consumption against higher import costs.
This included imported sugar, molasses and honey, which grew by 53.8 percent.
Rice and chemical fertiliser import volumes also rose by 68.5 and 71.05 percent to 899,790 metric tonnes and 722,642 metric tonnes, respectively.
Kenya’s total imports by value over the same period were largely unchanged, having fallen by a slight 1.2 percent to Sh1.88 trillion with the weakening of Kenya shilling against major world currencies serving to mask the decline in imported volumes.
The cost of importing goods and services usually goes up during a stint of local currency depreciation without a comparable growth in import values.
The average exchange rate of the Kenya shilling against the US dollar moved from Sh119.40 in September 2022 to Sh144.05 in September last year and has since depreciated further to Sh157.9.
