NAME OF SCHOOL: CHANDARIA SCHOOL OF BUSINESS

SEMESTER: SS2022
COURSE TITLE: INTERMEDIATE MICROECONOMICS
COURSE CODE: ECO 4010A
ASSIGNEMNT : TERM PAPER
TIME/DAYS: 9:00 - 10:40 am

NAME: ATTE EDICHI LINNE GRACE

ID NUMBER: 661522

THE ASSIGNEMNT

1. Undertake a situational analysis using PESTEL (political, economic, social,

technological, environmental and legal) factors that relate to or affect the boda-boda transport
sub-sector operators.

2. From your analysis in (1) above, will the initial operations of Government of Kenya
(enforcement of violation of traffic Act by boda boda operators) resolve the
challenges/factors that affect this transport sub-sector? If so why?

3. What recommendations would you give to the multisectoral committee set up to deal
with the issues affecting the boda boda transport sub-sector.
INTRODUCTION

Boda- Bodas, the vital East African mean of transport, taking its origin in Uganda in the late
1980’s to early 90’s is an affordable, convenient motorbike often use as a taxi or to ferry
goods. They created quite an empire and have been beneficial to the population, in spite of
the recent accumulation of negative impacts that seems to be affecting the transport sector in
Kenya.

PESTEL FACTORS AFFECTING BODA-BODA SECTOR

Regardless of the various advantages that boda-bodas have, they started violating some
fundamental safety rules as well as comprising the security of people. These problematics are
going to be discussed by using the PESTEL (Political, Economic, Social, Technological,
Environmental and legal) analysis which we will allow us to comprehend utterly the issue.

What political role do they play?

The boda boda transport business was in the limelight in early March 2022 for all the wrong
reasons. A group of riders sexually assaulted a female motorist in Nairobi. President Uhuru
Kenyatta ordered a crackdown on the entire sector in a bid to install sanity.The sector has
operated without decorum and decency for a long time. Drivers are not trained in road safety
– most don’t even have a driving license and they are a law unto themselves. This has bred
criminal gangs where impunity reigns supreme, especially on the road. The chaotic situation
has put drivers in danger: some have lost their lives along with their innocent passengers.
Thousands have been maimed. In 2019, for instance, 1,421 boda boda riders and thousands
passengers died, compared to 1,049 motor vehicle drivers and passengers. Some boda boda
riders have been accused of actively participating in or abetting crime. Some have been
accused of helping remove or conceal the bodies of those killed by criminals.

What social and economic role do they play?

When the government liberalized the motorcycle industry, many unemployed young men
took advantage of poor road networks and the chaotic transport sector to eke out a living by
transporting people and goods on motorbikes. The sector’s economic contribution is
immense: it is estimated that it provides more than one million direct jobs for riders who earn
roughly about less than US$10 a day. Treasury is estimated to be collecting roughly Ksh60
billion (about US$525 million) yearly in fuel taxes from boda bodas. Each consumes an
average of Ksh300 (about US$3) worth of petrol each in a day. It is, simply, a sector that
cannot be wished away. Boda bodas are a vital source of income for the youth in a country
with very few employment opportunities. They are popular with users because they are
convenient, fast, and cheap for transporting people and goods. Cheap imports from China and
India made motorbikes popular. Tax incentives also have made them affordable. Boda bodas
are valued for their efficiency. All said and done, motor cycle industry is playing a crucial
role in the economy and cannot be wished way.

On the social side Boda bodas create chaos everywhere they go. Kenyan motorists and
pedestrians have suffered due to the lack of traffic laws for boda boda riders. With impunity,
they use pedestrian lanes, carry excess passengers, do U-turns, ride against traffic, are seldom
trained and licensed and lack insurance in the full glare of law enforcement. Instead, traffic
police concentrate on motorists who are perceived to be more amenable to giving more
sizable bribes in case of a traffic infraction. As a result of lax enforcement, many hospitals
have dedicated wards for serious orthopedic injuries from boda boda.

What are the environmental and legal?

Yet, despite the remarkable gains the bikes have brought into the employment and the
transport sectors, their existence and continued use of fossil fuel come at the expense of the
environment, human health and climate. The hydrocarbons and greenhouse gases they emit
into the environment every day are dangerous air pollutants which are respiratory health
hazards. Researchers estimate that an average motorcycle pollutes the air 10 times more per
mile than a passenger car, a light truck or a sports utility vehicle (SUV). UN Environment
Program (UNEP) notes that besides driving air pollution, burning of fossil fuels is also the
leading cause of climate emergency.

What is happening on the legal side?

A state-owned road safety agency in Kenya is grappling with enforcement of new traffic
regulations aimed at reducing the number of road accidents involving two-wheeled
motorcycle taxis, popularly known as boda boda. Most of the riders do not have licenses
while others do not wear helmets or even reflector jackets. In a bid to enhance safety in
Kenya’s motorcycle taxi business, NTSA has announced new measures. These include
compelling suppliers and dealers of two- and three-wheeled motorcycles to ensure they only
sell vehicles complete with two helmets and two reflective jackets. No supplier, distributor or
person involved in the business of selling motorcycles in Kenya shall sell, distribute or
otherwise convey a motorcycle without the protective gear,” the regulations says. In addition,
owners of motorcycles must ensure only riders who hold a valid driving license or a valid
provisional license endorsed in respect of that class of motorcycle is permitted to ride the
motorcycle. Under the new regulations all riders to have a public service vehicle (PSV)
insurance, a valid license and minimum third party insurance. The agency says all riders must
now be registered by the authority. The regulations also forbid loads dragging on the road.
NTSA also has limited the number of passengers to one who, with the exception of someone
with a disability, "must sit astride and use foot rests".

What technological role do they play?

Kenya is importing more motorcycles than cars, doubling its fleet every 7-8 years. These are
generally inefficient and poorly maintained polluting motorcycles,” said Joyce Msuya, UNEP
Deputy Executive Director. “Kenya’s electricity is very green in 2019 with more than 80%
was generated by hydro, solar, geothermal, and wind. Shifting to electric bikes in Kenya,
Rwanda, Uganda and elsewhere will reduce costs, air pollution and Greenhouse Gas
Emissions, as well as create job.
Given the following research the government of Kenya’s early actions (enforcement of traffic
Act violations by boda boda operators would resolve the issue. On one hand, the
enforcement of new regulations concerning the Digitization of license registration will reduce
criminality and illegal activities involved with boda bodas business. On the other hand, the
instauration of this registration will allow the government to be motorize and manage the
amount of bikes operating illegally.

Recommendations
- Adopting electric bikes will definitely resolve a bunch of environmental matters. In
fact, the cost of running electric motorcycles is a fraction of their petrol counterparts.
UNEP studies show that boda boda drivers can more than double their income if they
make the switch, calling up the transition to electric mobility will require investments
in battery charging infrastructure. Kenya’s electric power generation capacity is
sufficient to support the charging infrastructure. However, while demand for
motorcycles is high, particularly in rural areas, distribution networks are inadequate.
However, this challenge may be tackled by using solar energy, setting up charging
stations, consulting boda-boda operators and using lithium ion batteries.
- Parliament should develop motorcycle specific legislation to cover among other
things the use of the helmet for both the rider and the passenger, the number of
passengers that can be safely carried by a motorcycle and of course ensure
enforcement.
- Government should propagate nationwide trainings on road ethics and values.
References

https://www.standardmedia.co.ke/business/opinion/article/2001391387/the-economics-and-
politics-of-boda-boda

https://www.standardmedia.co.ke/opinion/article/2001439916/government-neglect-lack-of-
laws-to-blame-for-boda-boda-madness

https://theconversation.com/boda-bodas-are-critical-to-kenyas-transport-system-but-theyve-
gone-rogue-179234

https://www.ken https://www.businessdailyafrica.com/bd/data-hub/why-boda-bodas-should-
go-green-3315324yanews.go.ke/challenges-increase-as-boda-boda-business-mushrooms/

https://www.worldhighways.com/feature/regulating-kenyas-boda-boda-business

https://www.unep.org/news-and-stories/press-release/e-boda-bodas-promising-day-electric-
transportation-east-africa