Used motor vehicle imports and the impact on road transportation in Zambia Based on the Review Report of 2017 Presented by Zali Chikuba at the Stakeholder Engagement Workshop Held at Intercontinental Hotel, Lusaka 26th April 2017   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” Outline Introduction Objectives of the Study Methodology Key Findings Policy Implications Policy Recommendations Conclusion   “Working Towards the formulation of Sound Economic Policies”

Introduction 2014 publication, “used motor vehicle imports and the impact on Zambian economy” working paper Highlights Factors influencing demand for motor vehicles Aging Zambia’s motor vehicle fleet Deteriorating fitness of status of the fleet

“Working Towards the formulation of Sound Economic Policies” Introduction Economic growth over the 2000 – 2010 decade strong & fair since then Growing middle class with increased consumption of both durable and non-durable goods This has resulted in a growing consumption of motor vehicles, particularly, used ones Economic Growth   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” Introduction Presently, no local motor vehicle manufacture or reconditioning Most vehicles are imported from second hand market outside Zambia with quality uncertainties   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies”   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” Potential Problems with the Second-hand Car Market Low quality motor vehicles imports “lemons” Increased maintenance burden Environmental and health costs Road safety concerns Lost opportunity for own auto industry and associated upstream activities   “Working Towards the formulation of Sound Economic Policies”

Objectives of the review study To review the aging status of Zambia’s motor vehicle fleet between 2006 and 2017, To review the fitness status of Zambia’s motor vehicle fleet between 2006 and 2017, To review the relationship between the source market of motor vehicles – new or second-hand – and the fitness status, and To review the relationship between motor vehicle ages and fitness statuses.   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” Methodology Desk Review Reviewed national motor vehicle registration and fitness data from RTSA. The study is mainly descriptive in nature Mean, median, mode, skewness …   “Working Towards the formulation of Sound Economic Policies”

Definition of Key Concepts Motor Vehicle Fleet Includes heavy and light passenger and freight vehicles – but excludes all sorts of motorcycles, tractors and trailers. Motor Vehicle Fitness A registered motor vehicle that has a certificate of fitness issued by RTSA. Fit lifespan of Motor Vehicle Time period in years between the initial registration of a motor vehicle in Zambia and the time the motor vehicles fails to obtain a certificate of fitness for a period exceeding 3 months. Motor Vehicle Age Time period in years from the year of manufacture to 1st August, 2014.   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” Key Findings The average age of Zambia’s motor vehicle fleet still increasing As at 25 March 2017, Zambia’s vehicle fleet approximated 580,990. 87.4% were acquired from the second-hand market and 12.6% were acquired as new vehicles. By 2017, the most common age for motor vehicles was 18 years, up from; 17 years in 2014, and 13 years in 2006 Forecast, 20 years in 2019. 2014 & 2017, vehicles less than 10 years had reduced significantly.   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the Formulation of Sound Economic Policies” Age Profile of Zambia's Motor Vehicle Fleet   “Working Towards the Formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” The increase in the age of the fleet matters for three major reasons: The risk of breakdowns increases It has a negative impact on the environment There is a risk of worsening road safety   “Working Towards the formulation of Sound Economic Policies”

Imported vehicles still older Average Age of Vehicles at Importation Falls Slightly for 2016 & 2017 Average age at which vehicles are imported had risen from 10.5 years in 2006 to slightly less than 13 years in 2014 . But in 2016, that age reduced to slightly less than 12 years Note: Data for 2017 is for 3 months from January to March   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” The proportion of motor vehicles without roadworthiness certificates continued to rise THE NUMBER OF VEHICLES WHICH ARE DEEMED UNFIT HAS INCREASED SIGNIFICANTLY Average fit-lifespan of second-hand vehicle imports rises from 4 years in 2014 to 5 years in 2017 while that of new motor vehicles is slightly greater than 12 years, (global expected lifespan of a standard motor vehicle; 13 years). FIT LIFESPAN OF SECOND-HAND MOTOR VEHICLES IN ZAMBIA INCREASES   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” In 2007, ~3.3% of all vehicles which had been roadworthy the previous year were deemed unfit and not legally allowed to continue to be driven. The proportion continued to rise 4.5% for 2010, 7.2% for 2014 , 10.2% for 2016, & 24.1 for 2017** This is of concern because there are several leakages of non-roadworthy vehicles on the public roads in Zambia. Zambia has some of the highest road traffic death rates in the world & in Africa estimated at 23.7 road traffic death rates per 100,000 pop. (WHO, 2013).   “Working Towards the formulation of Sound Economic Policies”

Policy Recommendations Short term policy options A strengthening of the pre- shipment road worthiness assessments Changes to the current import duty and excise tax treatment for imported motor vehicles. Placing a cap on the age of vehicles imported into Zambia    “Working Towards the formulation of Sound Economic Policies”

Medium to Long Term Policy Options Strengthening of the public transport system Introduce motor vehicle scrappage policy (cash for clunkers) Commence local car assembly of popular models   “Working Towards the formulation of Sound Economic Policies”

“Working Towards the formulation of Sound Economic Policies” Thank you   “Working Towards the formulation of Sound Economic Policies”