The economic implication of Electric Bikes in Africa

Africa’s reliance on fossil fuels has far-reaching economic implications, from high import costs to volatile exchange rates. Burman emphasises the importance of transitioning to electric mobility: “For any emerging market which is procuring refined or fossil fuels like gasoline and diesel, you’re actually using precious currency to import fossil fuels. That has a huge impact on the exchange rate.”

Electric bikes, powered by locally produced electricity, offer a viable alternative. By reducing the need for imported fuel, countries can achieve substantial savings and greater economic stability. Burman elaborates, “Through the energy transition, we want to move from fossil fuel-based modes of transportation to clean electric transportation. This shift is crucial for the economic independence of African nations.”

Drawing from his extensive experience, Burman highlights the imbalance in global subsidies: “I worked in Shell before, so I know this one. The total subsidies annually, which fossil fuel companies receive all over the world, is about $6 trillion. Of that $6 trillion, subsidies in transportation equate to about $3.5 trillion, which means almost 60%. How much does electric mobility or clean renewables receive? Less than $100 billion. So compare $100 billion to $6 trillion—that is 60 times!”

He continues, “What I’m saying is you phase out subsidies but move that delta, which you are reducing, to clean infrastructure. See, subsidies lead to lower gasoline prices, but gradually, in five years, if I keep reducing subsidies and if I give more subsidies to all-electric bike makers and infrastructure providers, then in five years in Lagos, for example, you’ll see 10,000 charging points instead of 5,000 gas stations.”

The health impacts of fossil fuel emissions are well-documented, with respiratory diseases and other ailments placing a heavy burden on public health systems. Burman points out the severe consequences: “Fossil fuels have a second-order impact, with a significant severe impact on the health of citizens. We want to reduce this burden through the adoption of clean, electric transportation.”

Electric bikes offer a cleaner, healthier mode of transportation. With zero emissions, they contribute to improved urban air quality and reduce the incidence of pollution-related health issues. As Burman notes, “Our mission at SPIRO is to bring affordable and accessible mobility to the large group of people who do not have access to this technology. Cleaner air means healthier communities, and that is a goal worth striving for.”

The high costs of maintaining and fueling petrol vehicles can be a significant burden for many African families. Electric bikes present a cost-effective alternative. “Through localisation, our bikes will be 30 to 40% cheaper, including running costs,” Burman explains. “This makes a substantial difference for the average user.”

This affordability translates to substantial savings for users, allowing them to allocate more of their income to essential needs such as food and education. Burman shares an impactful observation: “If they can save 25% to 30% in their running costs, they can feed their families and pay for school fees. This is not just about transportation; it’s about improving quality of life.”

SPIRO’s commitment to local manufacturing and job creation further amplifies its positive impact. “Today, we have over 2,000 people working at SPIRO. By the end of this year, we will have at least 30,000-35,000 motorbikes on the road,” says Burman. The company’s new manufacturing facility in Nairobi will go live in July, and plans for additional plants in Nigeria and other countries underscore SPIRO’s dedication to creating local jobs and upskilling workers.

The economic benefits extend beyond job creation. By reducing fuel import bills and investing in local infrastructure, SPIRO contributes to economic stability and growth. “We are putting the seed today by starting a factory in Nairobi. In addition, we’re hiring locals, and when it is operational in July, you will see 95% of the factory as local staff,” Burman highlights.

SPIRO’s integrated approach, from manufacturing to end-user delivery, ensures quality and reliability across the board. “We are an integrated OEM, which means we assemble our motorbikes, make our own batteries, and operate our battery swapping stations. The entire end-to-end infrastructure is owned and operated by SPIRO,” explains Burman.

Looking ahead, SPIRO’s expansion plans are ambitious. “By the end of the year, we should be present in at least 10 or 12 markets in Africa,” Burman reveals. The company’s proactive engagement with policymakers and strategic partnerships, such as the $50 million debt facility from AFREXIMBANK, are crucial to its growth. “This money is going to be judiciously deployed for infrastructure deployment,” says Burman.

The transition to electric bikes in Africa, championed by SPIRO, promises significant environmental and economic benefits. From reducing fossil fuel dependency and improving public health to lowering transportation costs and creating local jobs, the impact is far-reaching. As Burman aptly puts it, “This is a transformational journey. There are no shortcuts to it, and it will take years, but I’m pleasantly surprised to see that people are signing up even in small countries like Benin and Togo. Also, I see that whether it is India or Africa, electric vehicles are at a super early stage.”