Monday, October 24, 2016

KCCA IS DAMNED IF IT DOES, DAMNED IF IT DOESN’T

On Wednesday the minister in charge of Kampala Beti Kamya issued a directive that all vendors be taken off the streets in the capital city.

The directive came after city traders threatened to evict the vendors themselves if government did nothing about them. City traders argue that the vendors constitute unfair competition and are driving them out of business.

The vendors do not pay taxes, rent or any city dues which allow them undercut the shopkeepers but as if that is not enough vendors, by congesting the pavements, often block paying customers from getting to the traders’ shops.

"From a purely economic perspective this is a difficult case to argue against and one can see why Kampala Capital City Authority (KCCA) too would be concerned; a contagion of business collapses in the city would not only single out the capital as place not to do business, but would also hit them where it hurts most, in the pocket as revenues from businesses collapse...

In addition the vendors can be an eye sore, litter the city and can even pose security risks.

The irony of it is that the street vendors probably have ambitions of taking out space in a shop to sell their wares or owning their own shops altogether one day. Their future ambitions would be scuttled if the street vendors entrenched themselves in business culture of the country.

Other countries have managed this by organising flee markets, outdoor markets organised every so often where mostly second hand wares are sold, but their main selling point is that customers can find bargains there.

We shouldn’t forget that street vendors are often good citizens who rather than turn to theft and burglary, forced against the wall they have decided to cobble together some capital, buy some goods and hit the street.

But KCCA have the force of the law behind them.

The challenge of course is that the vendor issue is not an entirely economic one.

The politics is murky as these things often are, but the vendors may represent a failure of government policy. That government is not creating a good enough enabling environment for job creation to at least match the available job seekers. This of course poses an opportunity for political rivals who would side with vendors as a way of scoring political points.

So on one side you would have opposition politicians agitating to keep them on the street while government would rather sweep them away under some long forgotten carpet.

Sadly once the vendor issue is shifted away from the economics and into the realm of politics, the vendors invariably suffer.

We tend to treat the symptom – deal with the vendor rather than the cause of why they need to seek a livelihood on the streets.

"In other economies these vendors, who constitute surplus labour would be snapped up by industry. Unfortunately for us our attempts at industrialisation have not kept pace with the number of graduates we are churning out annually at all levels of education....

So the question has to be why isn’t big industry not setting up in Uganda? For one they owe us nothing. Show them that we can be a viable proposition and they will beat a path to our door.

We have a huge regional market, but we are a high cost production center compared to our neighbours; We have a huge labour force, but their skills are inadequate at best and non-existent at worst. We boast of high returns on investment for businessmen who set up shop here but there are numerous hurdles – access to capital, land acquisition, qualified personnel and corruption to dodge before we can collect on the promise of high returns.

In short we are too hard to business with and it does not help that we do not have enough local business to play as hand holders for bigger concerns coming into the region.


So yes the vendors may have been swept off the street but its only a matter of time and the fundamental issues which remain unaddressed will see them back on the street in a little while.

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