Life as a street vendor may seem hard but it actually pays to be mobile, bringing the market to passers-by who may welcome the convenience. MISAK WORKNEH, FORTUNE STAFF WRITER takes to the street to explore the business of vending, its tribulations and solutions.
His street-honed trading skills are out in full force. He entices an elderly woman strolling on the busy streets of Arat Kilo into buying one of his cell phone covers, claiming it is exactly the quality she would get in one of the shops for double the price.
“I don’t want to be an outlaw,” said Mohammed Aman, a local street vendor on King George VI Street. “But come hell or high water, I have to eat too.”
He has upgraded his livelihood from the much riskier business of smuggling, mainly of small pieces such as mobile phone covers, memory cards and other cheap accessories.
As Mohammed approached his 40s he moved away from contraband and became a street vendor. Selling the same items on the streets is safer and more profitable for him. It is worth the daily five kilometre walk from Chid Tera, around Merkato to Arat Kilo.
Street vending, one of the earliest forms of trading, has evolved to be problematic as it has become a cornerstone of the modern enterprise. Unfair competition between registered businesses and street vending is at the heart of the tide against street traders. Apart from the intrinsic problem of being unaccounted in the formal business system, issues of pricing, quality compromise and tampering define street vending, and as an outlet for a deeply entrenched illegal system of selling contraband items.
Despite complaints from local shop owners, street vending is becoming a defining feature of Addis Abeba’s many streets. Findings of academic studies indicate that this increase is not unique to Addis. Studies done on the informal sector in general indicate that in Addis, street vending is the first choice – the easiest escape from unemployment, requiring minimum capital, education and resources to become established. Without having to pay tax or meet other business expenses, this trade brings the vendors a daily average of 500 Br to 1,000 Br, according to research carried out by the Addis Abeba City Government’s Office of Code Enforcement (OCE) in September of 2014.
The Customer Protection Authority and the Code Enforcement Bureau were established in 2010 and 2012 respectively. Their mandate involves sheltering registered tax paying business and protecting consumers from counterfeit products. Both practices provide the rationale for a legal framework outlawing informal street vending, though weredas sometimes make provision for vending.
The Bureau is mandated to control and regulate, among others, unlawful or unlicensed businesses.
“Conditions are unwelcoming for people like us,” Mohammed said furiously, referring to the past weeks’ recurring incident where three plastic bags, that he estimates to be worth 1,000 Br – 3,000 Br each, had been confiscated from him by the Enforcers.
Another street vendor corroborated Mohammed’s comments.
Redwan Nuri, a youngster in his mid-20s, reluctantly recounted his dealings with the Enforcers, a.k.a. denb askebari, while sitting on a roadside traffic railing.
“I watch out for any sign of them, he said, complaining about these officers who, according to him, harass them all the time.
As soon as they appear, I’m gone.”
He did acknowledge that in cases when the officers come clad in civil attire, as opposed to their usual uniforms, losing one’s products is a definite possibility.
“Last week I carried items which cost more than 4,000 Br,” Redwan said.
The financial blow was hard when they were confiscated. Yet, it did not keep him from coming back.
But to the dismay of street vendors, the worst is yet to come. Studies are underway to come up with an out of the box idea of doing away with street vending.
“These people get harder and harder to control,” Mesay Gebremedhin, legal expert at Kirkos District, Wereda 7 Code Enforcement Service complained.”To succeed, we’re forced to rethink our raids.”
The unorthodox manner of doing things – among others raiding the streets in plain clothes, however, opens doors for manipulating the regulatory authority – the vendors claim.
Last month the City Administration took a bold measure identifying culprits. Of those identified, 175 were penalized while 99 of them were taken to court.
Though working in Kirkos, an area infamous for its many roadside traders, Mesay refuted any claim by the vendors about the conducts of the Code Enforcement Officers, wholeheartedly maintaining that any acts of misconducts are a rarity in the office.
Under article 4 (11) of the Addis Abeba city regulation 54/2012 establishing the Code Enforcement Office, officers of the Bureau are required to wear uniforms and identification badges at all times while conducting their duties.
Despite the few personnel we have at our disposal, none of our officers patrols the streets alone. We dispatch our officers in pairs to avoid the risk of corruption and maximize their safety, said Mesay.
Yet, this Office is reputed to be one of the most corrupt and it is widely perceived to have a draconian modus operandi in its battle against informal businesspeople who do their transactions on city sidewalks.
Deadly hide and seek or run for life scenes between the vendors and denbs are commonly witnessed on the streets.
“The chances of accident are high,” a driver around Megenagna told Fortune, adding, “vendors re at the mercy of drivers, when they run away from the Enforcers.
In the last five years close to 93,000 vendors have been subjected to legal proceedings, showing an annual increase rate of roughly 10pc, data from the Enforcement Office indicate. The same source estimates total numbers nearing 40,000 last year.
The number is not insignificant, so authorities try different means of accomodating the vendors in the formal sector.
“It is not only the stick mechanism – impounding and fining – we use,” Mesay said. “We also employ the carrot – trying to reform them into mainstream economic actors.”
Of the carrot options, one is organising street vendors in numbers and stationing them in shops through the Federal Micro & Small Enterprises (SME) Development Agency. That is the case if they are trading in one of the five organised SME fields (construction, manufacturing, trade, urban agriculture, and service) that operate under the umbrella of the Agency. The other option is establishing their own legal business independently.
“This will give them a more stable market base and help them to avoid conflict with the law and law enforcers,” said Abozenech Negash, senior public officer at the Agency.
Redwan had actually tried that route before returning to street vending. He said that though they may not have shops, most of them have a steady supplier and would be more than happy to pay taxes and offload products in a steady manner.
He had asked for and received a shop around Ginfile in Arat Kilo, in one of the buildings constructed exclusively to be used as shops for SMEs. But the location of these shops was a non-starter for his business.
“I don’t think a serious market-oriented study could lead to the spot I was assigned to,” he said. “Had I moved to that place I would have been out of business in a week.”
The weredas established Sunday markets with allocated spaces on designated streets is the other approach.
That is problematic too, the vendors claim. They are of the opinion that sitting idly for five days a week only to work weekends does not merit good business, while getting organised in an SME is a far-fetched notion for others.
Procedural requirements for organising an SME include showing a minimum of 5,000 Br capital. To obtain a trade licence at any wereda, requires presentation of an Addis Abeba residence identification card.These requirements sometimes create insurmountable obstacles because traders like Mohammed, Redwan, and their friends lead a squatter-based lifestyle without any possibility of permanent residence.
When it comes to financing, one might be able to get a loan from microfinance institutions, after saving 20pc of the 5,000 Br mentioned, but it is mandatory for loan applicants to have a guarantor who has a government job and earns a minimum monthly salary of 1,000Br.
But those perceptions are not unanimous.
Traders who are organised through the SME system are able to showcase their wares at bazaar style markets at least in the period just before every major holiday.
One such business is Afiya Vaseline, a private share company established a little over a year ago. Its Advertising Officer, Tizazu Ayisan, is seen promoting the benefits of their new ginger-based product at a bazaar held at Menelik Square.
“Business is good,” he stated. “This is the fourth event we have participated in so far, and we’ve managed to acquire quite a lot of new customers who are interested in our products.”
Customers seem to be the fuelling factor behind such statements as more and more people are seen haggling and buying items on the streets every day.
“I like buying from the streets,” a man in his mid thirties told Fortune while bargaining for a pair of boxer shorts on Gabon Street. ”You can usually find the same items as the ones sold in boutiques for a cheaper price.”
He admitted that buying products on the streets at certain times of day can result in one being hustled from time to time but concluded that if such acts are conducted with the proper amount of caution the result is highly cost effective.
Street vending accounts for more than the half of the continent’s economical income. According to research done by United Nations Economic & Social Council (ECOSOC) in 2015, the informal sector accounts for 70pc and 62pc of the economic income for sub-Saharan countries and northern African countries respectively.
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