Are Matatus the main Cause of Traffic Congestion in Kenya?
Category: Economic Development
By: Maureen Barasa,
State of play
Traffic congestion is a major problem in the city of Nairobi. Not only does it cause pollution but also causes loss of revenue, estimated at Ksh 60 Billion a day in Nairobi, and reduced productivity due to hours wasted in traffic. There have been claims that Matatus (Public Service Vehicles) is the main cause of that traffic congestion and efforts made to ban their entry into the Nairobi Central Business District by creating bus terminus outside the city center as well as encouraging cycling into the city and increasing lanes to reduce congestion. This has only burdened passengers (the demand side) using public transport by increasing time spent on the road and caused further inconveniences as commuters have to spend more time walking to the required destinations. Existing infrastructure does not safely accommodate cycling around the city as well. These measures have not been fruitful. Therefore, the County government has plans to introduce Bus Rapid Transit on selected routes in Nairobi to ease traffic congestion.
Public roads are classified as common resource goods in basic economic classification. Such goods are rival, meaning they are consumed by a single user at a time and non-excludable because it is impossible to exclude people from use. Traffic congestion occurs when there is rivalry for space and the road price is low due to construction through taxes. Different forms of public transit offer the cheapest mobility option around towns. According to the 2019 Kenya Population and Housing Census report, 15% of households own bicycles, 6.3 % own cars, 0.9% own buses, lorry or three-wheeler truck, 9.2% own motorcycles while 0.5% own Tuk Tuks. This implies that 68.1% of the Kenyan population do not own any motorized form of transport.
Demand for Public Roads
Table 1 above illustrates new vehicle registration and importation in Kenya annually between 2015 and 2019. From the table, it is evident that the new private vehicles registered are more than the new public service vehicles registered. For 30 of the new private vehicles registered, 1 new public vehicle is registered. This explains the larger percentage of vehicles occupying the road space. Therefore, the claim that Matatus are the main cause of traffic congestion in Kenya is subject to dispute. Private vehicles constituted 96.8% of all the new vehicles registered in 2019. A look at the motor vehicle importation in Kenya over the last five years shows a decrease in the number of motor vehicles imported into the country in 2016 from 2015. This was attributed to the higher excise taxes in importing second-hand vehicles while luxury cars had their Excise taxes reduce.
According to the Numbeo report of 2020, Nairobi was ranked the second most congested city in Africa with a score of 276.64 in the Traffic Index. The average time spent in traffic was 56.94 minutes. It is estimated that Nairobi has about 20,000 Matatus providing commercial transportation services. As table 2 below shows buses, trucks, lorries, 3-wheeler trucks and Tuk Tuks combined that are mostly used for public transport are owned by 1.6% of all households in Nairobi compared to 12.9% of households that own cars used for private mode of transport. This is according to the 2019 Kenya Population and Housing Census report. This undermines the common perception that Matatus are the main cause of traffic congestion in Nairobi and Kenya
Solutions for Traffic Congestion
A number of policy instruments can be used to manage traffic congestion. These include the introduction of toll charges on major highways, the introduction of a carbon tax to raise the cost of using a motor vehicle, introducing congestion taxes, encouraging car-pooling and ride-sharing and increasing parking fees within the city. The cumulative effect would raise the costs of use of public roads, reduce their demand and lead to better allocation of limited space. If toll charges, a form of road pricing is implemented, high charges during peak hours will reduce traffic congestion as some commuters will opt for cheaper alternative forms of transport such as car-pooling and ridesharing or opt to use the road during less busy hours to avoid charges. The toll charges are meant to increase the price as the demand for road use rises.
In cities such London and Stockholm a congestion tax has been introduced apart from the normal taxes on fuel, insurance and parking. Drivers have to pay a congestion tax if they drive within designated city center zones. In Stockholm, the congestion varies during the day, with peak charges applied in morning and evening rush hours. This is a disincentive for motorists to drive into the city when they have alternatives. This could be applied in Kenya as commuters may have a preference for public mode of transport and times of travel.
A congestion tax coupled with a carbon tax whose main aim is to reduce pollution would also raise the cost of travel. The carbon tax can be set by looking at the vehicle fuel capacity divided by the number of passengers per vehicle. A 6000 cc bus ferrying 62 passengers would pay Ksh 96.77 carbon tax per passenger whereas a 3000 cc 14-seater pays Ksh 214 carbon tax per passenger or a 1500 cc car ferrying 4 passengers pays Ksh 375 carbon tax. This is shown in table 2 below. The smaller vehicles would not be cost-effective. The private preference will shift towards higher capacity vehicles which are relatively cheaper in this case.
There is a difference between parking space and road space. The parking space is a private good, meaning it is rival and excludable whereas road space is a common resource good as stated earlier. Congestion is caused by rivalry for road space and this implies parking charges are not an efficient mechanism for managing traffic congestion. However, increased parking fees in the Central Business District is an additional disincentive for private vehicle owners, therefore, leading them to shift their mode choice decision as well as reduce travel demand. Matatus which are perceived as the main cause of traffic congestion on the contrary don’t park in the city center as they only pick up and drop passengers at different bus stations in the city.
Conclusion
This analysis suggests that the main policy solutions to easing traffic congestion in Nairobi should include implementing a congestion tax, carbon tax and toll charges that shift preferences on the demand side. Commuters will have a preference on the form of transport as well as the time they choose to travel. The charges will internalize the negative externalities of road use that include congestion and pollution caused by different forms of transport. Lastly, data on imported and registered vehicles disputes the claim that Matatus are the main cause of traffic congestion.
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Are Matatus the main Cause of Traffic Congestion in Kenya?
| Post date: Wed, Mar 31, 2021 |
| Category: Economic Development |
| By: Maureen Barasa, |
State of play
Traffic congestion is a major problem in the city of Nairobi. Not only does it cause pollution but also causes loss of revenue, estimated at Ksh 60 Billion a day in Nairobi, and reduced productivity due to hours wasted in traffic. There have been claims that Matatus (Public Service Vehicles) is the main cause of that traffic congestion and efforts made to ban their entry into the Nairobi Central Business District by creating bus terminus outside the city center as well as encouraging cycling into the city and increasing lanes to reduce congestion. This has only burdened passengers (the demand side) using public transport by increasing time spent on the road and caused further inconveniences as commuters have to spend more time walking to the required destinations. Existing infrastructure does not safely accommodate cycling around the city as well. These measures have not been fruitful. Therefore, the County government has plans to introduce Bus Rapid Transit on selected routes in Nairobi to ease traffic congestion.
Public roads are classified as common resource goods in basic economic classification. Such goods are rival, meaning they are consumed by a single user at a time and non-excludable because it is impossible to exclude people from use. Traffic congestion occurs when there is rivalry for space and the road price is low due to construction through taxes. Different forms of public transit offer the cheapest mobility option around towns. According to the 2019 Kenya Population and Housing Census report, 15% of households own bicycles, 6.3 % own cars, 0.9% own buses, lorry or three-wheeler truck, 9.2% own motorcycles while 0.5% own Tuk Tuks. This implies that 68.1% of the Kenyan population do not own any motorized form of transport.
Demand for Public Roads
Table 1 above illustrates new vehicle registration and importation in Kenya annually between 2015 and 2019. From the table, it is evident that the new private vehicles registered are more than the new public service vehicles registered. For 30 of the new private vehicles registered, 1 new public vehicle is registered. This explains the larger percentage of vehicles occupying the road space. Therefore, the claim that Matatus are the main cause of traffic congestion in Kenya is subject to dispute. Private vehicles constituted 96.8% of all the new vehicles registered in 2019. A look at the motor vehicle importation in Kenya over the last five years shows a decrease in the number of motor vehicles imported into the country in 2016 from 2015. This was attributed to the higher excise taxes in importing second-hand vehicles while luxury cars had their Excise taxes reduce.
According to the Numbeo report of 2020, Nairobi was ranked the second most congested city in Africa with a score of 276.64 in the Traffic Index. The average time spent in traffic was 56.94 minutes. It is estimated that Nairobi has about 20,000 Matatus providing commercial transportation services. As table 2 below shows buses, trucks, lorries, 3-wheeler trucks and Tuk Tuks combined that are mostly used for public transport are owned by 1.6% of all households in Nairobi compared to 12.9% of households that own cars used for private mode of transport. This is according to the 2019 Kenya Population and Housing Census report. This undermines the common perception that Matatus are the main cause of traffic congestion in Nairobi and Kenya
Solutions for Traffic Congestion
A number of policy instruments can be used to manage traffic congestion. These include the introduction of toll charges on major highways, the introduction of a carbon tax to raise the cost of using a motor vehicle, introducing congestion taxes, encouraging car-pooling and ride-sharing and increasing parking fees within the city. The cumulative effect would raise the costs of use of public roads, reduce their demand and lead to better allocation of limited space. If toll charges, a form of road pricing is implemented, high charges during peak hours will reduce traffic congestion as some commuters will opt for cheaper alternative forms of transport such as car-pooling and ridesharing or opt to use the road during less busy hours to avoid charges. The toll charges are meant to increase the price as the demand for road use rises.
In cities such London and Stockholm a congestion tax has been introduced apart from the normal taxes on fuel, insurance and parking. Drivers have to pay a congestion tax if they drive within designated city center zones. In Stockholm, the congestion varies during the day, with peak charges applied in morning and evening rush hours. This is a disincentive for motorists to drive into the city when they have alternatives. This could be applied in Kenya as commuters may have a preference for public mode of transport and times of travel.
A congestion tax coupled with a carbon tax whose main aim is to reduce pollution would also raise the cost of travel. The carbon tax can be set by looking at the vehicle fuel capacity divided by the number of passengers per vehicle. A 6000 cc bus ferrying 62 passengers would pay Ksh 96.77 carbon tax per passenger whereas a 3000 cc 14-seater pays Ksh 214 carbon tax per passenger or a 1500 cc car ferrying 4 passengers pays Ksh 375 carbon tax. This is shown in table 2 below. The smaller vehicles would not be cost-effective. The private preference will shift towards higher capacity vehicles which are relatively cheaper in this case.
There is a difference between parking space and road space. The parking space is a private good, meaning it is rival and excludable whereas road space is a common resource good as stated earlier. Congestion is caused by rivalry for road space and this implies parking charges are not an efficient mechanism for managing traffic congestion. However, increased parking fees in the Central Business District is an additional disincentive for private vehicle owners, therefore, leading them to shift their mode choice decision as well as reduce travel demand. Matatus which are perceived as the main cause of traffic congestion on the contrary don’t park in the city center as they only pick up and drop passengers at different bus stations in the city.
Conclusion
This analysis suggests that the main policy solutions to easing traffic congestion in Nairobi should include implementing a congestion tax, carbon tax and toll charges that shift preferences on the demand side. Commuters will have a preference on the form of transport as well as the time they choose to travel. The charges will internalize the negative externalities of road use that include congestion and pollution caused by different forms of transport. Lastly, data on imported and registered vehicles disputes the claim that Matatus are the main cause of traffic congestion.
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Is Kenya’s Tax System Efficient, Optimal, and Equitable?
In my new paper, “On Efficiency, Equity, and Optimal Taxation: Reforming Kenya’s Tax System,” I examine Kenya’s tax system through the lenses of efficiency, equity, and optimality and recommend policy recommendations. I try to look at how efficiently the system generates revenue without distorting economic activity (efficiency), how fairly the tax burden is distributed across […]
Gen Z Collective Action on Taxation and Economic Policy.
Introduction The Finance Bill 2024 in Kenya sparked a wave of collective action primarily driven by Gen Z, marking a significant moment for youth engagement in Kenyan politics. This younger generation, known for their digital fluency and facing bleak economic prospects, utilised social media platforms to voice their discontent and mobilise protests against the proposed […]
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The credibility of Monetary Policy in Kenya is compromised at present by two factors: As we anticipated mid-year, inflation is headed below the target range for the first time; The 7-member Monetary Policy Committee (MPC) has four vacancies. In light of the former prospect, the MPC reduced the Central Bank of Kenya (CBK) Policy Rate, […]
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In the IMF WEO published yesterday, the IMF elaborated its macroeconomic framework for the ongoing IMF program. The numbers clarify how the program, derailed by the mid-year Gen-Z protests, has been adjusted to make possible the Board meeting for the combined 7th and 8th Reviews scheduled for October 30. The adjustments, unfortunately, again raise profound […]