The Kenyan National Treasury has published a draft policy framework that proposes to cut taxes and customs duties for electric vehicles imported, assembled or marketed in Nairobi and the other 46 counties. The goal of this policy is to guide Kenya’s economy towards a green development path that is low-carbon and climate-resilient, using various fiscal and economic measures.
This policy will have several advantages, such as:
- It will promote the use of at least 350 electric cars and bikes, which will replace some of the 2.2 million polluting vehicles that run on fossil fuels in the country.
- It will foster a transition in production, consumption and investment patterns towards low-carbon climate resilient and environmentally friendly practices.
- It will boost private sector green investment and innovation, as well as create new jobs and industries in the electric mobility sector.
- It will decrease Kenya’s reliance on fossil fuels and improve its energy security and resilience.
- It will support Kenya’s commitment to reduce carbon dioxide emissions from the transport sector and comply with international obligations.
The policy framework is expected to be passed in the Finance Act 2024 after approval by local authorities and parliamentarians. The government will fund this transition through the Hustler Fund, which is a digital financial inclusion initiative worth $402 million that offers credit to individuals and small businesses for their sustainable projects.