part-time musings

Tag: street trading

Informal traders want more support from governments

My posting on 24 November expressed the hope that authorities in Africa would begin to see informal trading in a more favourable light, and two recent news items have got me thinking about the topic again. The Mail & Guardian today highlighted a recent report which noted that 94% of street-traders interviewed in Johannesburg said that they had been harassed by the police. One of their principal complaints was that police failed to give receipts for goods they confiscated, thus making it difficult for traders to reclaim their merchandise. The M&G (‘Poor Traders Need Support’, 15 April 2008) also pointed to a forthcoming SADC conference on Poverty and Development in which it is hoped that governments will discuss ways of making the regulatory framework relating to cross-border trade fairer to informal traders.

The significance of cross-border informal trading is readily apparent to anyone in an African city, but these traders often face considerable difficulty in their interactions with state authorities, particularly when they’re passing through border controls. The M&G article quotes a Malawian trader – Herbert Tshitangai – who complains that

‘My problem is the high tax that is imposed on our goods. Most of the time you pay a quarter of the money that you make… The reason we pay so much tax is because the government does not recognise informal trading. We must have informal trading legalised. There should be clear tax on commodities — when you are being charged now, it depends on whom you meet at the border. That is our challenge.’

What’s apparent in both of these stories about informal trading is that traders are calling for more regulations not less – they’re pleading for regularised frameworks in which to operate. They want to know what taxes they will pay and what they can expect from the police and from border control officers. They want, in other words, a more defined policy framework in which to conduct their business. Let’s hope the SADC Conference goes some way to developing one.

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Street Trading in Africa: lessons from Dakar and Durban

The riots this week in Dakar in response to government efforts to clamp down on street traders remind us of the central role that informal trading plays in African cities, and equally of the disdain with which many governments and local authorities view the practice.

Local and national authorities in Africa trying to ‘clean up’ their cities generally dislike street traders. Not only are street traders regarded as an disorderly presence, cluttering and degrading the city landscape, there is also a perception that street trading is linked with poverty, criminality, and is somehow not a ‘legitimate’ form of retailing for modern, organized cities.

However, street-trading is frequently a more sophisticated practice than is made out, and street traders share many characteristics with brick and mortar retailers.

Street traders may have capitalization rates similar to other retailers of comparable size (Barry Isaac, ‘Price, Competition, and Profits among Hawkers and Shopkeepers in Pendembu, Sierra Leone’, Economic Development and Cultural Change, Vol. 29 (2), 1981), and are similarly committed to ongoing overhead costs such as licensing fees, rent, transportation, and storage.

Like all retailers, street traders are also concerned about the quality of their retail space. They are make assessments about the amount of selling space they need to be profitable. Here, for example, the Chairperson of the Queen Street traders in Durban, Dumisani Mthembu, is complaining to the Tribune that the profitability of his business was being affected by a reduction in his selling area by the city council:

“I have been selling here since 1996. I feed nine people, including my mother. Now they are reducing the area where I trade. How can you feed your family from such a small place?”

Small traders are also concerned about location, and what this means for access to their clientele. A Reuters report on the recent Dakar riots noted that a proposal to set up four permanent market precincts was rejected out of hand by traders who argued that this would remove them from the main thoroughfares used by their customers.

Certainly, locational convenience is hugely important to shoppers, as two quotations from a recent BBC online discussion on street hawkers in Africa show:

A Nairobi resident commented that, “I don’t think street hawkers are a nuisance because they sell things at a cheaper rate and more available as one is going home can get things on the way”.

And a Lagosian similarly noted that: “Come to think of it. How many people go into shops to buy vegetables, fruits, plantain, yam tubers and other perishable food items? …. after all, everybody is in a hurry and prefers to buy things while on the move to save time.”

Street traders share similar infrastructural requirements to other retailers, including: a need for protection from crime, reliable access to amenities such as electricity, water, lighting, and sanitation. City authorities are usually best placed to provide, or facilitate access to, these resources, but the antagonistic attitude of many city governments to street trading in Africa means that this is frequently not forthcoming.

However, not all cities adopt a negative approach to street trading. A recent report by the World Bank Development Institute highlights Durban as a particularly noteworthy example of positive local government engagement with the informal retail sector. Durban city authorities have encouraged the participation of street traders in local governance, for example providing them with a role in area-based management initiatives and providing forums for discussion and decision-making at large trading areas such as Warwick Junction. Durban city authorities have also invested heavily in providing infrastructure for street traders- setting up new markets, improving market facilities, and improving the provision of services such as sanitation, lighting, storage, and rubbish removal.

Essentially, cities have a choice between spending money on trying to prevent street trading, or on making it work. Given the large number of people who rely on street trading in African cities, both as a source of income or because it’s where they buy their food, one hopes that African cities will increasingly choose the latter option and come to regard street trading as a legitimate and valuable feature of the modern urban landscape.