Kenya defies the odds, car use rises despite inflation
Despite Kenya’s inflation, people in the country are using more cars now than they have in recent years, as indicated by the increase in the number of registered vehicles in the first nine months of 2023.
In the period under review, the East African country had a 25 percent surge in registered vehicles.
According to official data from the country’s National Bureau of Statistics and as seen in The BusinessDaily, a Kenyan news publication, “Kenyans registered 72 982 vehicles in the three quarters up from 57 978 in the same period last year.”
This is the highest figure since the Covid-19 pandemic. The number of registered vehicles in 2019 was 80,289.
The 2023 data show a peculiarity in Kenya’s economy, given the surge in prices of cars globally.
It is also worth noting that the production cost of cars is up significantly, causing consumers across the globe to delay purchasing newer models and sell their old ones to developing nations. This trend coupled with Kenya’s weakening currency, has driven up the cost of imported vehicles.
“According to the official exchange rate by the Central Bank of Kenya, the shilling, which is the biggest factor fueling the rise has shed 19 percent of its value since the year began to exchange at a low of 152 for units of the US dollar.
Dealers in the car market have attributed the rise in vehicle acquisitions to financing arrangements by banks and other financial institutions” the BusinessDaily report notes – Business Insider Africa
Read also: Kenyan car prices soar amidst tax surge and currency struggles
More research finds that trailers constituted the main increase, which practically tripled from 1 654 in the first three quarters of last year to 4 407. Minibuses and pickups, whose production is handled locally increased by 97,5 percent and 68,6 percent, respectively.
In addition to the increase in the cost of imported vehicles, Kenyans through out the year have had to deal with rising fuel costs. The energy inflation sent shock waves through out its economy, constituting an inconvenience Kenyans were unhappy to deal with.
In July, it was reported that fuel cost in the country pushed Kenyans to seek cheaper fuel from Tanzania. In the border town of Namanga in Kenya’s Kajiado County, dozens of drivers and riders of boda boda were progressively entering Tanzania to get less expensive gasoline.
At the time, a liter of gasoline was US$1,119 in Tanzania compared to Kenya’s US$1,398, which was the highest in the East African sub-continent. Business Insider Africa