Aside from the mobile phone, the other technology that has impacted Kenyan lives in the biggest way in the last few years is the century-old internal combustion engine- in the form of the motorcycle. The motorcycle serves as a good example of how tax policies can facilitate or cripple economic progress. In 2008, the Kenyan government implemented a duty waiver on motorcycle imports of engine capacity below 250 cc. From a mere 130,000 units in 2007, the number of registered motorcycles had grown to 800,000 units by 2014. This increase has provided 100,000 direct employment opportunities to Kenyans, and more indirect employment through backward linkages.
The presence of the motorcycle has spurred economic growth in many areas by facilitating the cost-effective transportation of people and goods. With the help of the motorcycle, virtually all areas within a distance of 50 kilometers from a tarmac road are reachable, a fact that has enabled farmers to access markets in population centers. In addition, many small scale traders have discovered a cost-effective logistics tool in the motorcycle. As an anecdote, the bakery industry in Kariobangi was once restricted to offloading products to nearby neighborhoods with the help of bicycles. However, the motorcycle has enabled this industry to market its products to places as far away as Machakos.
The other notable benefit of the motorcycle has been the opening up of hitherto unreachable areas. Due to lack of infrastructure, it was not uncommon to find unreachable areas within close proximity of tarmac roads. For instance, a settlement 10 Kms off a tarmac road but with no road infrastructure could easily translate to many hours of torturous travel. The introduction of cheap motorcycles bridged this gap, allowing people to settle in such areas with fewer inconveniences. This trend has seen many hitherto unreachable areas gain the critical threshold needed to attract and justify the setting up of infrastructure such as roads, and, consequently, formal P.S.V. routes. Previously, building such settlements took decades. However, the introduction of the motorcycle has shortened the process to just a couple of years. Hence, we can conclude that the motorcycle has somewhat lessened population pressure on neighborhoods. And this leads me to the question, what other economic potential is being held back by retrogressive taxation policies?
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Chinese motorcycle- Sourced at rock bottom prices, they are cheap and low quality.
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Indian motorcycle- A wee bit more expensive than the Chinese machines, slightly better quality, but crappy all the same.
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Japanese motorcycle- Slightly more expensive that the Indian machine, fairly better quality, but nowhere close to the Japanese quality of yore (thanks to globalization).