Pubescent Economy’s Growing Pains




Rare as it may be, it is not utterly absurd to find an informed, informative, conversation in a minibus taxi about policies and lack of government services. It was a Monday, at 8pm, and I was on my way from Megenagna to my home. The taxi fare was five Birr – typical for that time of the day. Had it been regular working hours, it would have been almost half that amount.

Somewhere along the way, though, disagreements arose over a passenger unwilling to pay. His justification: there is no rule, no mandated taxi tariff that says he has to pay five Birr, even at night.

Of course, the passenger was entirely within his rights, which he did not fail to point out. Consequently, the whole argument evolved into one about civil rights. For others – I would say the more informed ones – the culprit was the City Administration’s inefficient provision of services, which is creating disagreements between the service provider (the taxi owner) and the customer (the passengers).

Say, there was a rail line along that route, which would have accommodated one of Addis Abeba’s electric powered trains. A passenger who is unwilling to pay a higher tariff would have that option, while those with deeper pockets can take a taxi. It may even serve as an incentive for taxi owners to tweak their prices – which, as the hours go by, could reach 20 Br – and become creative enough to improve their services.

If only the government was able to cross-subsidise better, collect taxes from both the rich and the poor, and use it to adequately provide basic services for those that could not otherwise afford to pay for them, life would be easier.

The same goes for, say, health services. People could find pre-hospital services pro-bono. But there are those who choose for-profit businesses for better services or since neither NGOs nor public institutions can provide them in plentitude.

A free-market economy exists to ensure that competition endures, but it should not mean everything is a privilege. In such an economy, it is critical for the government to provide transport, telecom, health care, education, housing and water for all its citizens. Universal health care should be a right, much like access to the Internet. But there is no reason to expect an equal quality distribution of the above as principles such as the net neutrality dictate.

In fact, quality of services and products would be tough to ensure if private players are not allowed to provide them as well, side by side the government, with profit as the ultimate incentive to join the market. Thus, the government has to give leeway to the private sector in preparing regulations, especially for those that are providing services and products that otherwise would not have existed.

Night time taxi services by minibuses are one. If the state was to come in and set a tariff, either one similar to the regular daytime fares, or slightly higher, it would wreck the natural synchronicity of demand and supply that currently exists. For if there is a factor that separates getting a taxi after 8pm from getting one 12 hours later in the morning, it is the lack of long lines that eat away at the already low productivity of employees.

It is doubtful that taxi owners will be willing to work after hours with lower fares. It is similarly unlikely that commuters would continue to board minibus taxis if prices were too high. A blanket tariff for a set length of a journey would create one of these scenarios, while a flexible one, meaning no set tariff but a negotiated one between commuter and taxi owners, however stressful that may be at times, is the best possible prescription. For a country without adequate infrastructure, number of middle-income earners or provision of services, it is the only option.

Such hurdles are merely growing pains of a developing nation. Like a teenager that just hit puberty – thus has too big a jaw line the rest of his face has still not caught up with – certain things are bound to get ugly. And in traversing these waters, government bodies have to be careful not to make things worse. This is government inefficiency, which should not be made up for by constraining those that are filling the gap, but by allowing them to exist as public sector services are gradually improved.

There is a tendency to want more laws when the going gets tough in Ethiopia. There was a similar argument over private schools that kept hiking monthly fees last year. Again, the outcry was directed at the owners of the schools, when what parents should have protested was the poor state of public schools many are willing to spend a fortune to keep their children out of.

Private players simply see a gap, tend to fill it and keep swelling the cost of their products as long as they deem there is demand willing to pay for it. And as annoying as this may be for customers and users, the private sector will be severely missed if they leave for the sake of a restrictive market.

People should realise this and instead look to the government to better provide for its citizens. Whenever one raises the issue of rights, it is implied that someone has a duty to fulfil them, which more often than not, is a burden that falls squarely on the shoulders of the government.



By Christian Tesfaye
Christian Tesfaye (christian.tesfaye@addisfortune.net) is Fortune's Op-Ed Editor whose interests run amok in both directions of print and audiovisual storytelling.

Published on Jan 13,2018 [ Vol 18 ,No 924]


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