Informal Economy Here to Stay

The informal sector contributes a lot to the economy. Yet, it hardly receives policy attention. Inattention by the media to the informal sector also plays its role in the overall sidelining of the sector. Regardless, the sector is here to stay as it is a natural extension of the real economy.

In the market economy, the informal sector plays the role of complement. Street vending is what comes into mind. Urbanites take it as a traffic nuisance or roadside rubbish-generating indulgence. However, a closer look at vending reveals that it plays a very significant engagement for the low-income members of the community. Street vending includes all sorts of small trading, including labour.
The appalling truth is that the mainstream media, do not connect well with the less fortunate members of the community as much they do with the security forces and pedestrians who prefer to label street vendors as a social burden and not as businesspeople providing necessary services. Street vending is not only a trade needing the least amount of capital, but it is also a source of employment that eases the brunt of unemployment of those marginalized by circumstances.
Take the case of former land owners evicted in an exchange for nominal compensation and who have nowhere else to seek shelter. They may get employment as night guards for cheap wages, while the new owners enjoy the land in which they have lost their identities and personal histories.
The lottery ticket vendors carry packs of tickets and stroll around, from bar to bar, from shop to shop, or even try to sell by peering through the windows of vehicles at traffic lights. They work mostly without earning money worth a loaf of bread or a cup of tea, after a long days of sweating. Think of the shoe shine boys and even girls, these days, who sit around on their little boxes watching the shoes of passers-by and calling out to attract business often to no avail.
Those who vend their labour are a bit different. They usually stand by crossroads waiting for someone to drop by and offer them a small job. Sometimes a small boy or girl will come along, call them by their trade name, wezader, and take them to his or her home without even telling them what they are to perform or asking how much they charge. Those with some skill, carry their back sacks with hammers, saws and other tools, are often identified as skilled carpenters or masons or even plumbers and are usually contracted for better pay.
Let me take you to Merkato, once the largest open market in the continent. There, the bigger portion is reserved for open vending. In this static place, only seniority of possession counts. The Sunday market vendors are no exceptions to the rule.
They have wide scope, mending anything from repairing utensils of all sorts from steel pots to broken kettles or tea cups or cracked flasks to repairing old socks or canvas shoes; or selling brand new jackets. One can use one’s bargaining skills over selling prices until a deal is struck.
Think of it. Formal shop owners paying all sorts of income and sales taxes may complain and accuse vendors who play “cat and mouse” games daily for their survival. But if one takes the time to ask where these vendors get the items they are selling, it will be realised that normal traders cannot do away with vendors. They need them because they can sell their goods to vendors at a fair price. Vendors are the ones facilitating cheaper business.
There is no denying the fact that vendors cause traffic havoc or that they leave rubbish behind at the end of the Sunday market session. But that is a simple and manageable problem when seen in the context of mutual benefit for both the tax paying folks and the vendors.
The other perhaps not so transparent merit of the informal sector, pertains to the engagement of women in the business while carrying out sideline activities like cotton spinning. Little markets known as Gulits, are also readily accessible sources of urgently needed food items like onions, and other spices which cannot be made available otherwise.
As for the tidying-up, action programmes can be worked out by kebele officials to urge the vendors clean their vending sites as soon as they are done. Nothing can be done until it is done. City incumbents ought to find plots where small markets can be carried out on schedule. Until such time that the government makes employment much easier than it is at present, street vending is going to stay whether we like it or not.
Youngsters, in particular, can be deluded to engage in unwanted actions like picking pockets or breaking windows of vehicles to steal something. They may snatch cell phones from people without any regard to the value of the vital gadget.
I am not encouraging street vending development in our cities. All I am trying to do is show the role of the informal sector in a developing economy like ours and more so on the eve of holiday celebrations.

By Girma Feyissa

Published on Jan 24,2016 [ Vol 16 ,No 821]



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