What you need to know:
The boda boda business could be Uganda’s second largest employer after agriculture. However, this is a worrying trend considering its low contribution to economic growth. Roland Nasasira looks at the dynamics in the boda boda industry.
At this rate, the boda boda business could be the second largest employer of Ugandans, at least according to Standard Bank reports.
The 2013 report authored by Standard Bank analyst Simon Freemantle and economist Jeremy Stevens measured motorcycle exports from India to seven African countries including Nigeria, Angola, Uganda Egypt, Kenya, Guinea and Djibouti.
The findings indicate Nigeria is the largest importer of motor cycles from India followed by Angola with Uganda coming in at third position.
The bulk of Africa’s motorcycles are imported from India, which has a market share of more than 65 per cent. India manufactures the Bajaj Boxer and TVS brands, some of the most popular motorcycles across Africa and Uganda in particular.
Uganda, according to the report, imported motorcycles worth Shs113.4b ($31) compared to Nigeria’s Shs746.4b ($204m) and Angola’s Shs204.9b ($59m) in 2013.
The report puts Uganda ahead of Kenya and Tanzania as the leading importer of motor cycles in the East African region.
The steady growth
About two decades ago, Ugandans woke up to a new form of transport business – the boda boda.
The business laid its foundation in the continued growth of traffic with passengers searching for alternative means to the inconveniencing public transport.
More than 70 per cent of Ugandans use public transport as their main form of transport, according to Uganda Bureau of Statistics.
Data available from Kampala Capital City Authority indicates that Kampala alone has more than 120,000 motorcycles majority of which are engaged in commercial activities – boda bada.
The number, according to Atanansi Kafeero, the Kampala Boda boda Riders Association could be more considering that many cyclists are operating within the city without registration.
Out of the 120,000 Kafeero says, 38,000 motorcyclists operate within Kampala Central.
However, the irony is that 85 per cent of these motorcycles are not owned by the riders themselves but make a dependable livelihood for both the urban and rural youth.
On a daily basis an operator who doesn’t own a boda boda pays Shs10,000 to the own remaining with equally the same amount of money. On average a motorcycle goes for around Shs3.5m.
Explaining the growth
The above scenario partly explains the meticulous growth of the boda boda economy in a period of less than 15 years.
Sustained growth has also attracted manufacturing companies in Uganda establishing assembling plants and service centres.
For instance, in August 2013 TVS Motor Company, a major Indian automobile, established an assembling plant in Uganda with the company seeking to acquire a 25 per cent stake in Uganda’s motorcycle industry.
TVS, which has been in Uganda for at least 12 years, has a presence in 52 countries but Bajaj Auto remains the leading exporter to Africa. The company is the market leader in Nigeria, Kenya and Uganda.
Bajaj Auto, which exports to nearly 50 countries, has about 47 per cent of its overall shipments coming to Africa, according to data published by Live Mint an Indian based website.
The Standard Bank report indicates that India motorcycle exports to Africa have grown by 175 per cent since 2008, making pronounced strides in trying to square off with China, Korea and Japan.
Analyst data indicates India in 2013 exported almost three times more motorcycles to Africa than China; and half as many as Korea.
The extent of growth
By 2014 Kampala Central division alone was estimated to be holding more than 5,000 boda boda stages.
These could have grown substantially, given that many keep mushrooming in several other parts of the city.
But KCCA data remotely estimates the number of gazetted boda boda stages to be less than 1,000 and has plans to completely phase-out stages in the central business district and parts of upper Kampala.
Last year KCCA announced plans to evict all boda boda stages from the city centre but the plans seem to have fallen through as a result of political interference, according to analysts.
The areas that KCCA had planned to ban boda boda stages included Wandegeya, Mulago Round-About, Yusuf Lule Road, Jinja Road, Electoral Commission area and Entebbe Road up to Clock Tower.
The plan that has partly sought to regulate the rapidly growing boda boda business had sought to limit cyclists to the central business district to only dropping off passengers and would be banned from riding on Parliament Avenue, one of the high profile streets in Kampala housing the Parliament, ministries of Justice and Trade as well as headquarters of the Inspectorate of Government.
The boda boda politics
Regulating the boda boda business has been next to impossible considering their role in Uganda’s politics and the underlying threat of unemployment in Uganda.
Abdallah Kitata, key member of the boda boda association, recently told this newspaper that they should be involved in whatever plans government has to restructure their activities.
This, he said, is a good move but they must be drafted in at the earliest stage because “we understand the industry more than anyone else”.
“We want development in Kampala, but KCCA should collaborate with motorcyclists’ associations if they are to have this industry streamlined,” he said.
The associations, according to analysts are most times loose coalitions smacking with political activism.
However, notwithstanding the activism, Fredrick Omollo an Urban Planning lecturer at Makerere University, believes “any attempt to de-congest the city must not be executed hurriedly and to the exclusion of other stakeholders.”
“…the solution should not be a surprise as KCCA intends it because it will create more problems - there should be public involvement; those who use and or ride boda bodas,” Omollo told this newspaper recently.
A report complied by Kenya National Bureau of Standards indicated the country’s rapid growth in the services industries, particularly the boda boda business was worrying, given its low contribution to trade. Sustainable growth, the report indicated, could not easily be achieved if there was no productive engagements in terms of real production such as industrialisation.
The above concerns are not alien to Kenya but a mirror of what is happening across the region.
In Uganda instances of youth selling off large chunks of land have been popular, notwithstanding its short-term benefits.
Therefore the worry now should be how such a massive industry could be turned into a productive sector of long term development with real value in terms of investment.
The Kenyan situation
According to the Motorcycle Assembly Association of Kenya the motorcycle business generates about Shs13.6b (Ksh400m) on a daily basis.
The association’s chairman Isaac Kalua says on average about 14.4 million people ride boda bodas every day. This signifies the importance of the sector in growing the country’s economy.
Kalua says the industry has contributed over Shs74.8b (Kh2.2b) to the national treasury in form of direct taxes with over 500,000 motorcycles on Kenyan roads. However, he notes the industry needs policies that will propel it to the next level.
Growth and regulation
The boda boda business, which initially started in the eastern Busia District for cross-border smuggling, became popular in Kampala after President Museveni hitched a ride on one for a trip to Kololo ceremonial grounds for nomination as a 2001 presidential candidate.
In later years, boda bodas grew into a powerful political constituency, with the president himself regularly intervening, even at the expense of regulation.