Discussions between the Kenya Bureau of Standards (KBS) and motor vehicle industry players on the contentious issue of age limit on imported second-hand vehicles is healthy, but should be handled with sobriety.
The second-hand vehicle business is a lucrative $70 billion (Sh7.1 trillion) venture. Some 45 million vehicles used in Africa are mainly used imports.
The ‘2018 UN Environment Africa Used Vehicle’ report says Africa imports four times more automotive products than it exports; 96 per cent of Kenya’s imported cars were used.
The push for a lower age limit is informed by their negative effects on the environment and human health.
Studies show that more than 1.5 billion urbanites breathe air that falls afoul of World Health Organisation standards, causing more that a million deaths a year.
More than 70 percent of deaths from outdoor air pollution occur in developing countries.
Health cost of urban air pollution is nearing $1 billion a year, while the health effects cost is between five to 20 percent of GDP.
Road transport is responsible for 20-25 percent of carbon dioxide and other greenhouse gas emissions.
Every year, 10,000 people die on East Africa’s roads with an average fatality cost of $12,000 and cost per injury of $3,000.
Are we prepared, in terms of capacity and infrastructure, to handle the pressure of high influx of vehicles?
The imported used vehicle industry affords low-to-middle-income consumers a chance to buy affordable vehicles since a new car costs about four times an imported used one and is, therefore, prohibitive to them.
Any controls, including using a prescribed age or an emission standard would result in higher average prices of imported vehicles, reduced imports, increased value of vehicles in the market and longer lives for existing vehicles.
With a lower age limit, the group at the greatest risk would be the SME investors in the sector.
However, uncontrolled influx of used vehicles will have effects such as traffic congestion, leading to a substantial loss of productivity, high fuel consumption, low air quality and safety issues.
Also, a vehicle’s age has a direct impact on its availability, productivity and operating costs.
Several African countries have adopted mechanisms to control used car imports.
Egypt, South Africa, Sudan and Morocco banned them, while Algeria, Tunisia, Libya, Mozambique and Kenya have an age limit of six to nine years.
More than 24 countries are either implementing a 10-year rule or have no such regulations.
Harmonising age limit in the EAC region, whose discussion has been on for a decade, seems inevitable.
However, it is a delicate balancing act: A cost-benefit analysis between the negative and economic impact on health, safety and environmental, and socioeconomic benefits.
But since the number of imported used vehicles will reduce, public transporters will have to fill the gap, creating business opportunities in areas such as bus rapid transit and light rail transit.
The age limit is also likely to trigger significant investments in the manufacturing and/or assembly of affordable new vehicles with the industry sourcing raw materials locally.