WHAT OTHERS SAY: A closer look at the fuel price fight

It was remarkable seeing the bipartisan wave of anger that swept Kenya recently over the implementation of a 16 per cent tax on petroleum products.

There aren’t many things, excepting perhaps ugali prices, which ordinarily generate that level of consensus outrage across the Kenyan political divide.

The general argument is that the cost of living is already too high, and pump prices are already at wallet-bursting levels as it were. And then there is the classic one you encounter everywhere in Africa – that additional revenues don’t make any difference to the lives of the people, because they are simply stolen by corrupt officials and politicians.

President Uhuru Kenyatta’s intervention to have the VAT lowered to 8 per cent has mollified only a few, with many feeling that is still too high.

While the issue of fuel cost is a big one, it’s likely not the primary reason for the loud protests. Rather, the reason is to be found in for who the fuel is unaffordable. There are trends in Africa’s broader economies, and in the urban areas, that if leadership paid attention to more closely, would help predict the kind of backlash that greeted the fuel VAT in Kenya.

For example, a few days ago Uganda’s President Yoweri Museveni was speaking on TV about the rampant insecurity in the south of the country.

He cited the dramatic increase in the number of cars and motorcycles in the country over the last 30 years, to make the point that monitoring the bad guys using vehicles to commit crimes and get away had become a Herculean challenge that the government didn’t have to face before.

Kenya has nothing on Uganda when it comes to the bodaboda (motorcycle taxi) as anyone who’s visited the capital Kampala knows. Museveni said that in 1987 there were 4,187 registered motorcycles in the country. In 2018 the number is 1,063,922, most of them bodabodas.

Twenty years ago in Uganda, and certainly in Kenya too, the fellows who felt the pinch of fuel prices were car owners and public service passengers to who the prices were passed. Today, you also have bodaboda people, who are several times more than car owners, to contend with. In the case of Uganda, the daily newspaper The Monitor said in a report last year that bodaboda is easily the second largest employer in the country after agriculture. Those are very many people.

The margins in the bodaboda business are small, and the people who use it, many of them among the lowest earners in Africa’s burgeoning urban areas, are hyper sensitive to the smallest of changes.

In the case of Kenya, it has been compounded by what might call the “bodabodasation” of car ownership.

Maybe until 10 years ago, the profile of the first time car owner, who didn’t get it from his or her parents, was standard in Kenya. A 26-30 year-old employee in some office, buying a Ksh500,000 second-hand Japanese import, using a loan from their employer.

But the gig economy (hustling) has exploded in Kenya, and the import of even cheaper smaller second-hand Japanese cars has risen. It used to be that the Toyota Vitz was the cheapest car one could buy, but now it is a near-luxury.

There are all sorts that one gets for under Ksh200,000 – even from hustle money. In turn, the demand for these cars have been driven by the expansion of Nairobi and towns, fuelled by both population growth, and the labyrinth of new by-passes and outer ring roads, that led to a boom in relatively affordable housing for early entrants into the job market in the far flung parts of the city.

Thus unlike the average car owner of old, who after buying a vehicle had anything up to Ksh500,000 lying in an account, and wouldn’t feel the fuel pinch, today’s is younger, and has barely Ksh25,000 left after paying rent and other bills.

The bodaboda sector and “small” car owners is a product of some of the few dynamic things that are happening in African economies today. We cannot manage economies for them like we did 20 years ago.

The competition for their pockets is intense, and they are touchy about who reaches in. One industry that understood that quickly is the mobile phone firms. There was, indeed, a time when the cheapest airtime you could buy was Sh500. Today it is Sh5. The telcos have grown rich and fat, and the economy has benefited immensely, hasn’t it?