Street vending has become a part of everyday life in Addis. On almost every major pedestrian road, there are many young people displaying their wares, from electronics, to shoes, and calling out to city residents to visit them. While these products are cheap and convenient for many, street vending is becoming the gathering place for unemployed youth who move to the cities looking for new opportunities. At the same time, the sourcing of the products is feeding into the problem the country is experiencing with contraband, as many of the items sold on the streets are illegally smuggled into the country. Addressing these issues is a big part of the city administration’s agenda, as EBR’s Ashenafi Endale reports.
All over the streets of Addis, young men and women stand in front of blue and orange tarps, displaying everything from shoes and socks, to pots and pans for sale. They are part of the boom in street vending that has happened in the capital over the past few years, leading to every major pedestrian thoroughfare becoming a shopping pavilion.
Sintayehu Kebede, 24, is one of them. He is usually busy in the evening, displaying women’s shoes on the pedestrian pavement around Mexico Square, calling out to passersby and alertly looking out for law enforcement at the same time. When he came to Addis six years ago, from Becho, one of the woredas in the state of Oromia, Sintayehu had no doubt his future would be bright. After he failed to pass the preparatory entrance exam at grade ten, he persuaded his family to let him go to Addis and get licensed to operate a construction machine. They sold their cattle, and sent him off with almost ETB30,000.
However, two years after he arrived in Addis, his driving instructors told him he failed his exams. “I was ashamed to go back to my family. I didn’t have a job or any means to survive in Addis.” Eventually, he became a street vendor. “It was the only work I could start without much capital.”
Street vending is a common open market for Addis Ababa, but it is not an easy business. In between standing on open streets in hot and cold weather, the usually-illegal vendors play a game of hide-and-seek with law enforcement.
Currently, there are close to 80,000 street vendors in Addis Ababa, according to estimates by the Addis Ababa Trade Bureau, while some researchers place the figure closer to 100,000. Despite the city administration’s attempts to control the market, it has become one of Addis’s go to places for affordable goods.
Street vendors work in two ways. In some places, like Megenagna, around AMCE, and Kazanchis, the government has allotted spaces to vendors, so they can operate legally. Only legal shop owners can sell there, so they hire people to sell their products for them.
The second way is not legal. The street vendors have no recognition, so must try and stay ahead of the authorities. “You never stay in the same area again, at least for a month. On some days, you can make up to ETB500. However, the law enforcement can confiscate your items someday. Of course, some officers ask money and return it privately. Some of them sell it,” explains Sintayehu.
Many street vendors receive the goods they sell from shop owners, and warehouses, usually located in Mercato. However, there are five main sources for products sold on the streets. The first source is smugglers who bring the items through the borders in eastern and southern Ethiopia, and then to Addis through different networks. These contraband items usually include electronics and cheap, second hand clothes.
The second source is the items confiscated as contraband by the former Ministry of Customs and Revenue, which it later sells at auction. The buyers, which are usually legal businesses, buy in bulk and distribute to street sellers.
The third method is through people who go door to door collecting used household materials to repair, renew, and resell, usually in Mercato while the fourth source is legal shops and wholesalers in Addis Ababa.
The fifth source is local industries and small and medium enterprises. “Products from Kolfe Keranio and other districts of Addis, where there are many small and medium garments, dominate the informal market. Many textile factories also use street vendors. For instance, you can buy a shirt or socks forETB100 and ETB20, respectively, on the street, but the same product would go for three times the price at a boutique. If you have relatives or friends working at such factories, you take the products, sell to people you know, or on street, or even door to door and get commissions,” says a street vendor, who did not wish to be identified.
Even so, most street vendors get their products from warehouse owners and brokers in Mercato, according to a shop owner who works in Mercato. “People do not want to sell in shops because the product is contraband and they do not want to pay tax. Even if they do have shops, they display a very small number of items. Most off their product goes to street vendors,” he says. “The main sources of the products are importers who do trades without a paper trail. They buy containers full of illegally shipped products from Djibouti ports. Then they smuggle them into Addis Ababa. But I cannot say they have no government backing. Even the legal shops in Addis Ababa outsource products to street vendors to increase their sales.”
According to data from the Ministry of Revenue, Ethiopia lost ETB3.2 billion in collectable tax revenue over the last five years due to contraband trade. Street vending is contributing to the problem according to some experts, who also emphasize that local products cannot compete with cheap imports, which is poses a danger to the growth of the real domestic industry. “Local industries have more overhead costs. They import the raw materials andthey pay tax. So their price cannot be same as the contrabandists, who can sell the same item at less than half the price of the local product,” Birhanu Gizaw (PhD), associate professor and lecturer of industrial engineering at the Addis Ababa University. “The end user gets cheap, but poor quality items from the informal market. Moreover, it damages the motivation of domestic investors to get involved in manufacturing.”
However, director of Sisay Solomon, Industry Development and Environmental Safety Directorate at the Addis Ababa Industry Bureau, argues that street vendors are helpful for local small industries. “Many small industries and Micro and Small Enterprises are using street vendors as sales outlets. The main problem of such small industries is lack of display and sales places,” he says. the Addis Ababa municipality, which established the Addis Ababa Office of Code Enforcement, have been trying to control the trend by force, which usually ends with physical engagements. In order to minimize impacts of street vending in Addis Ababa, the city government also approved a new policy seven months ago, which will allow street vendors to be registered and given an Addis Ababa residence ID and unemployment letter. After the registration, they are given a TIN number, badge and a place to sell. Under the scheme, the vendors must provide receipts to show where they sourced their products.
So far, 32,906 street vendors have been registered, and 22,109 of them have Addis Ababa IDs, according to Zewdu Lema, Informal Trade Registration and Licensing Facilitation team leader at the Trade Bureau. So far, 4,968 have taken badges. “It is a three year pilot project we launched in 47 woredas of the capital. But now all 116 woredas are asking, because the street vending is expanding even to the outskirt areas. Some open spaces have been identified for this purpose. But so far, it started in few spots like around the Tor Hailoch area. We have forwarded the issue of street vendors who have no ID to the Mayor’s Office.”
For Sisay, the vicious cycle of unemployment-migration-informal sector will end only if all towns work by adopting and implementing ‘mini industrial parks’ approach. Since last year, the government has allowed regional towns to build their own version of industrial parks. Regional states can develop such parks on 50, 100, and 250 hectares of land, based on their capacity. The Addis Ababa city government is also in search of open space, according to Sisay.
“Mini industrial parks will make a big difference, if they are well-implemented. Small industries, which have had under serious problems of land shortage, will find space. It can also take huge numbers of youth, in every town.”
However, for others like Sintayehu, who depend on street vending, it is not just an issue of survival, but success. “I need to accumulate capital so I start good business one day,” he says. “I want to distribute products to regions.”
7th Year • Dec.16 – Jan.15 2019 • No. 69