Little is said on the benefits of street hawkers. Complaints or stories of their nuisance are more common; skipping the trade’s importance for job creation, and its role in Nigeria’s retail sector.
Recently though, a sales manager at Unilever published an exposé on a street trader earning ₦1,000,000 per month— as much income as a mid-level manager at Total Nigeria. For a moment, people saw street trading differently.
Was it really possible?
Well, Mathew Eigbe, a Network Marketer and Consumer Behaviour expert, thinks so. “It’s possible given the network Chinedu [the street trader] has built. You see, he is earning from his effort and the effort of some 100 others,” he explains. “This is the concept of leverage. John Paul Getty, one of the early billionaires in America put it this way, ‘I would rather have 1% of the efforts of a hundred people than 100% of my own effort’.”
Chinedu Okorafor earns 30 times the minimum wage because he has progressed and expanded in the business. It all sounds like the typical business strategies we see in the formal sector. Cases like this reveal the potential of an understated industry - one which the government continues to prohibit...unsuccessfully.
As outstanding as Chinedu’s story is, he earns a living from a criminalised job.
The Lagos state government established a law in 2003, banning street trading and hawking - buyers and sellers are liable to a ₦90,000 fine or six months in jail. In 2016 there was a renewed effort to enforce it.
Regardless, street traders continue to go about their business, though they are subject to constant harassment and evictions by law enforcement bodies. One of the most recent being the eviction at Obalende in February.
The government argues that street hawking leads to traffic congestion and the sale of fake products.
Yet, they have found solutions to it in several reasonable ways that Nigeria’s megacity, can adopt since outrightly banning hasn’t proved feasible. The unenforced law has been in place for 17 years and the ambiguity of its enforcement is hardly optimal for any party. Many consumers are even unaware that the law exists and continue to patronise street traders.
For or against traders?
Nigeria lacks alternative job opportunities. A third of Lagosians were under or unemployed in 2018.
The State grapples with overpopulation and economic inequality; thousands of people relocate to the State every week to earn a living, resulting in a shortage of housing and jobs.
Hundreds of thousands have resorted to creating their own jobs through street traders. Without that option, many don’t know how else to survive.
The government knows this.
Indeed, the fact that street traders still operate regardless of the ban is indicative of two things. First, the government is quite aware of the importance of street trading to the working poor. Second: it has found it hard to implement stringent rules against them.
Another piece of confusion is the misalignment between the Federal and State government.
Two years ago, the Federal Government launched TraderMoni, a microcredit platform to help tackle poverty in Nigeria by providing loans to petty traders.
So you have the Federal Government explicitly aiding petty traders and the State Government doing the opposite. Ironically, recently banned Keke riders are also eligible for the ₦10,000 loan.
Street hawker selling puff puff
Source: Adetunji via Unsplash
Street traders are valued on the retail supply chain
Another party that supports the existence of street traders is the formal retail sector.
At the core of the supply chain management of food producers, is a unique Direct-To-Consumer strategy that street trading enables.
Food and beverage companies with popular Fast Moving Consumer Goods (FCMGs) often touted at roadsides have a network of ‘hawker hubs’, which they harness to determine how successful a product is in the market.
These hubs constitute groups of hawkers positioned to ensure the delivery of goods from the retailer to consumers on the supply chain.
Little wonder street traders continually have collections of drinks and snacks such as NBC’s Coke, Seven-Up’s Pepsi, UAC’s Gala, and OK Foods’ Pure Bliss. They hardly run out of these goods either through direct supply or via retailers. In any case, they are an instrumental part of the chain.
“Most hawkers are trying to do fast sales; so goods they choose to sell are either the ones that are more profitable or the ones that are moving faster,” says a Supply Chain Manager at the Nigerian Bottling Company.
“The more you see your goods in their basket, it shows how well your product is moving. Our hawker hub is actually very important to us that are selling consumables, because of the structure that we have in Lagos.”
The State Government continues to kick against street trading, yet these forces: job creation, support from the Federal Government and the retail sector, will continue to undermine its efforts.
Can the sector be regulated instead?
Here’s a tip from California.
In 2018, California’s capital city, Los Angeles (one of the top 15 megacities in the world) voted to regulate and legalise street trading. Until then, street vendors, similar to Lagos, faced harassment and fines.
Key amongst the reason for the ban on street trading in Lagos is to clean up the city and modernise the environment.
California worked to ensure that traders acquire business licenses and food permits to conduct their activities in particular areas. Additionally, traders could not interrupt the flow of commuters and had to maintain a clean area around their stalls.
But maybe these might be hard to enforce in a city as chaotic as Lagos. So what have others done?
In Monrovia, Liberia’s capital, the city’s corporation signed a memorandum of understanding (MOU) with the Federation of Petty Traders and the Informal Workers’ Union of Liberia (FEPTIWUL) in September 2018 to ensure better synergy between the petty traders and the government.
The union represents over 5,000 traders in Liberia and provides vendors with formal licenses. The MOU also enables the traders to operate securely without police harassment.
Trader associations exist in Lagos, and perhaps the problem is that too many of them exist across the State. To adopt Liberia’s approach, all these associations can be integrated into one recognised union with subdivisions.
For instance, 23rd Market in Festac, Lagos, has a solid association, the Festac Traders Association, with smaller units for the divisions of traders in the market. Obalende also has its own, as well as Computer Village in Ikeja.
Combining these associations will enable the government to have better control and understanding between both parties. Then, we can design a policy that works for Lagos.
Street trader selling fruits
Source: Magbe via Unsplash
If ensuring the livelihood of thousands isn’t motivation enough, then perhaps the government can also see it as an opportunity to gain revenue.
An outright ban of street traders means the government can’t potentially capitalise on earning taxes from their activities.
In the past, LIRS (Lagos Inland Revenue Service) did attempt to tax roadside sellers operating in the informal retail sector. Sellers’ lack of receipts or record books of transactions made this process very challenging. LIRS soon found that to achieve their goal of taxing the traders, they had to localise their processes.
LIRS chose to go through a different route: the Iya Oloja (market leader) and her several deputies across Lagos collect little sums from the traders’, in groups. Then meet with the tax revenue officer to deposit the money into the internal revenue’s bank account.
All traders were mandated to register with a market association for better documentation. The tax officer also issues a general receipt for the group, and traders can have their own copies too.
However, this process has been conflated in several ways as different parties use the law to threaten the hawkers for money.
Madam Bose*, who sold soft drinks under the bridge at Obalende, Lagos, until law enforcement agency dislodged the park explains: “KAI go collect money. Taskforce, na settlement. Agebero dey. Agbero, na garage e dey. Iya Oloja too go collect. All of them get their day. Iya Oloja’s own fit be every Wednesday or Thursday.”
“At the end of the day, the government themselves don’t send them to do all these things, they just come in uniform and capitalise on them and cheat them,” a shop owner at Lagos Island explains.
Economists estimated that $33 million in tax on direct sales by street traders was missing from public revenue in California. Estimating Nigeria's equivalent will be difficult due to how informal the sector is, but there are gains to be made.
Hence, formalising the sector can become a win-win for both the government and street traders.
With few other opportunities to earn a living, those at the lower class of society often have no alternatives but to create their own path within the informal economy.
The legalisation of street traders not only protects the working poor, but it gives them an opportunity to climb up the social ladder while strengthening the retail sector and government revenues.
Given the protection of their rights to trade, a more formal working environment, and government support like TraderMoni; maybe then, we can expect to hear more success stories from street hawkers.
* Name changed to protect their identity
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