COVID-19 EFFECTS

Fewer matatus registered in 2020, as investors shied away from the business

This was the highest decline in newly registered motor vehicles

In Summary
  • Data from the Economic Survey 2021 shows that registration of new matatus dropped from 1,932 units in 2019 to 1,084 units in 2020.
  • Measures put in place to reduce the spread of Covid-19 saw the sector reel from low returns.
Matatus at Kariobangi Roundabout on July 29, 2021
Matatus at Kariobangi Roundabout on July 29, 2021
Image: CHARLENE MALWA

Strict Covid-19 containment measures saw the number of matatus registered in 2020 sharply decline as many people kept off the business. 

The measures included reduced capacity in the matatus, inter-county travel restrictions, curfews and working from home saw the sector reel from low returns.

The 14-seater matatus were restricted to carrying eight passengers, 25-seater buses to 15 passengers and those with a capacity of 30 seats had to maintain a 60 per cent occupancy.

There were also on and off movement restrictions from  Nairobi, Kajiado, Kiambu, Nakuru, Machakos, Mombasa among others which saw operators plying those routes put park their vehicles. 

Data from the Economic Survey 2021 shows that registration of new minibuses/matatus dropped by 43.9 per cent to 1,084 units in 2020 from 1,932 units in 2019.

“This was the highest decline in newly registered motor vehicles,” said KNBS.

The low uptake of public transport vehicles(PSV) led to a 22.5 per cent decline in the number of PSV licenses issued declined by from 63,938 in 2019 to 49,560 in 2020.

This decline was mainly attributed to restriction of movement by Government to curb the spread of Covid-19 that resulted in the reduction in uptake of PSV licenses.

The number of PSV licenses issued to matatus dropped by 23.0 per cent from 47,183 in 2019 to 36,323 in 2020 while those issued to buses dropped by 17.5 per cent from 8,969 in 2019 to 7,401 in 2020.

The number of PSV licenses issued to mini-buses also declined by 25.0 per cent from 7,786 in 2019 to 5,836 in 2020.

“Dwindling revenues saw many operators shy away from the business as for one to start any business it must be profitable,” said Simon Kimutai, chairman of the Matatu Owners'Association .

Kimutai noted that with the almost 50 per cent dip in returns in the sector, no businessman would want to enter such as a business as operational costs still remained high.

The pandemic dealt the matatu industry major blows that it might never recover from even with the resumption of full capacity in August.

These include changes in people’s work habits, with some firms now adopting a hybrid approach as some employees work from home.

Commuters are also increasingly cautious, with a few who can afford taking cabs doing so rather than boarding matatus.

“The sector is still uncertain as SMEs are still doing badly and there is no much movement,” said Kimutai.

He said the sector is banking on the resumption of full capacity to boost revenues, but currently they still remain low.

Overall, the number of newly registered motor vehicles decreased by 14.2 per cent from 109,751 units in 2019 to 94,128 units in 2020.

Panel vans and pickups reduced by 40.5 per cent to 6,065 units while buses and coaches decreased by 32.8 per cent to 900 units in 2020.

Other significant reductions in new registrations were recorded for saloon cars and station wagons that declined by 22.2 per cent and 20.1 per cent to 7,754 units and 57,962 units in 2020, respectively.

Three wheelers reduced by 19.5 per cent to 5,896 units in 2020.

On a positive note, the number of newly registered motor cycles increased by 16.2 per cent from 217,425 in 2019 to 252,601 in 2020.

The increase was mainly attributed to a 17.4 per cent growth in motor and auto cycles registered from 210,103 units in 2019 to 246,705 units in 2020.