STREET VENDING: MEANS OF LIVELIHOOD FOR THE URBAN POOR AND CHALLENGE FOR THE CITY ADMINISTRATION IN ETHIOPIA

Abstract

Street vending in Ethiopia is a very important yet unbridled component of the informal sector. In the context of the current demographic dynamics and absence of sufficient job opportunities, street vending has become an important economic shelter for the urban poor. The key reasons for joining street vending include the small capital requirement, lack of access to credit facilities, and lack of suitable and commercially viable trading outlets. Street vendors use their personal savings, family transfers and informal credits as start-up capital. Street vendors generate by far better income than they used to get in their original villages. The social network is vital for joining the sector. The common narrative that operators in the informal sector are mainly with no formal education is frequently attacked as more people with formal education, including school dropouts, high-school completes and college graduates, are rapidly joining the sector. One of the major effects of street vending in Addis Ababa is the disruption in pedestrians’ free movement and vehicle traffic. Presence of large crowd of vendors in a given space is the function of the size (volume) of items carried by an individual vendor. Formal shop owners identify street vendors as unfair competitors. Many people in Addis are accustomed to “shopping” at the streets since vendors offer merchandise at relatively lower prices. Street vending has unregulated feature whereby the government loses tax income which could have been collected had the transactions taken place legally. Local governments are forced to allocate huge budgets to hire as many officers to control street businesses. However, given the recurrent rise in the crowd of immigrants and weakness of institutions, the task of regulating street business is becoming almost unfeasible. In Ethiopia, the economic and social significance of street vending is not yet well studied and articulated to guide state policy directions aimed at alleviating urban poverty.

Keywords

• informal sector;
• street vending;
• imigrants;
• urban poor