How can Africa’s continental free trade agreement be moved forward from talk to action? An eventful week in Ghana ended with new promises from ... African governments and state parties to speed up processes towards the full realisation of the world’s largest free trade area – AfCFTA.
Kiira Motors, a government-owned automotive enterprise is set to assemble 1,030 buses by end of 2021.
But the success of the plant depends on having a market for its products. That is where the government comes in. It has banned the importation of buses and awarded a contract to little-known local company Tondeka to run a bus rapid transit for the capital city, Kampala.
The bus system will in the long term include the creation of bus stations and devoted lanes for buses to give them an advantage over the traffic-clogged streets.
Kiira Motors received almost $40m in seed funding from government in 2018 to begin manufacturing. With this fund, it is finalising construction of a manufacturing plant in Jinja, 85km east of Kampala. The construction is being undertaken by the National Enterprise Corporation, a commercial arm of the Ugandan army.
Kiira Motors say will start fabricating buses at this plant in July.
Kiira’s director of marketing and sales, Allan Muhumuza tells The Africa Report that the company wants to address the endemic traffic congestion in Kampala and other cities that results in losing over 24000 working hours daily. The new buses could save Uganda more than $400m on its car-importation bill, mitigate air pollution with electric buses and create jobs.
The company’s latest product is the 47-seater Kayoola diesel bus.
This is the latest bus exterior at the plant under construction:
— Kiira Motors (@KiiraMotors) April 18, 2021
This is the bus’s interior design:
When the evening finds you in the Ugandan made #KayoolaCoach, just relax and enjoy👇up to your destination.
▶️Reclining leather seats
▶️USB charging ports
— Sharon Love Nagawa (@LoveNagawa) April 9, 2021
“We have seen a lot of interest, a lot of support from Ugandans for these products. With strategic partners, we are working towards having 1,030 buses on the road by end of the year […] and 50 of these will be electric,” Muhumuza says. Kiira Motors’ partner on the manufacturing project is the state-owned China Hi-Tech Group Corporation.
Kiira Motors says it will be making buses on demand only, focusing on customisation.
Disrupting the existing public transport system
But as Kiira and the government pursue their goals of solving the public transport problem in Uganda, they will disrupt the business of the boda boda (motorcycles) and mini-buses that provide livelihoods for tens of thousands of families in Kampala.
When buses are introduced in Kampala, mini buses and boda boda will be kicked out of the heart of the city, according to the plan. More than 10,000 mini buses and an estimated 100,000 motorcycles transport passengers in Kampala each day. Each mini bus directly employs at least two people – a driver and conductor – and a boda boda employs a rider.
The article continues below
Get your free PDF: Top 200 banks 2019
The race to transform
Complete the form and download, for free, the highlights from The Africa Report’s Exclusive Ranking of Africa’s top 200 banks from last year. Get your free PDF by completing the following form
And asked if kicking out mini buses, taxis and causing job losses, will dent Kiira Motors public image, Muhumuza says: “I don’t think so.” Mini bus operators were promised jobs when the Kiira buses will start operating in Kampala. Tondeka says it will create 5,000 jobs, yet Kampala’s informal sector public transport employs more than 120,000 people – as taxi drivers, conductors and motorcycle riders.
Muhumuza says: “People who operate these mini buses can operate buses. They can be drivers, they can do ticketing and actually earn better money.”
Tondeka initially signed a deal with government to import 980 buses from India to operate in Kampala, but it is now waiting for Kiira Motors buses. Tondeka was originally supposed to start operations in September last year, but Covid and other problems have slowed it down. Tondeka has signed another deal with the government that does not specify when they will start operations.
Uganda’s President Yoweri Museveni slapped a ban on the importation of buses in October last year, leaving Kiira Motors with the opportunity to dominate the sector. The President explained his goals: “I don’t want to hear of imported buses. The buses will be built here. I also don’t want to hear of assembled buses here. Assembling means someone else makes the bus and you bring and assemble it here.”
Local push back
Giving Kampala routes exclusively to buses has faced backlash from politicians and actors in the transport sector.
The central government, rather than the local government, took the decision on bus rapid transit and the Tondeka deal.
Some Kampala political leaders are not embracing it. “As leaders in Kampala, we were never involved from the start. Our queries were: why did government chose to give this business to private individuals instead of the Kampala Capital City Authority (KCCA)?,” asks Doreen Nyanjura, Kampala deputy lord mayor.
Kampala is run by two antagonistic camps – a political wing and technocrats wing of KCCA – who are both answerable to central government. Kampala’s officials are mainly from opposition parties.
Nyanjura predicts that there will be a clash between mini bus operators who complained of being sidelined by those who want to bring in buses.
Mustafa Mayambala, who leads a group of mini bus operators in Kampala, says they are not resisting development. He says they raised many queries:
- How will buses operate without bus terminals?
- How are buses going to operate on narrow roads?
- Why can’t current mini bus operators be part of the new system?
Mayambala also says they warmed the government that it will not be able to chase mini bus operators out of Kampala in one day. “They will not wake up and say ‘Go!’ There has to be a plan on how taxis and buses will operate concurrently for a certain period. They have to be removed in a phased manner.”
Assembly or manufacturing?
Museveni said he wants local automobile manufacturing, but that will take time a long time and the development of a local automative parts ecosystem.
Muhumuza claims Kiira’s “buses are not assembled” but fabricated. He prefers to use the term “technological transfer” from the Chinese company, though all materials will be imported from China. He’s is also vague on the percentage of materials that will be sourced locally.
But the target is to have 65% of materials used for manufacturing buses be sourced locally by 2030, which is a very ambitious target, given the pace at which the automobile industries have developed in more advanced African economies, like Morocco and South Africa.
Kiira’s goal is also to reach full utilisation of the plant, producing 5,000 vehicles per year, by 2030.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options