1.1. Supply networks for cities and the key actors
1.2. The market sector
1.3. Wholesale markets: Problems and challenges
1.1.1. Farm produce: Trade and non-trade networks
1.1.2. Organization of indirect trade networks
1.1.3. Risky economic environment: Non-competitive strategies and practices
1.1.4. Market actors: Wholesalers and retailers
1.1.5. Manufactured goods and staple foods (rice, flour, sugar)
In describing the operation of food supply networks and the key urban actors (wholesalers and retailers), a distinction is made between farm produce and manufactured goods. While there have been very few studies on trade in manufactured goods in African cities, there is substantial literature on marketing systems for food, especially farm produce. As such this study was based primarily on review of data and information from secondary sources. This chapter highlights mainly the crucial role of access to market information in the organization and operation of FSDSs. It also shows the importance of recognizing that non-competitive practices in the supply networks are rational economic responses to an imperfect environment.
Food supply to the urban population in sub-Saharan Africa usually involves a combination of trade and non-trade networks. The trade network can be divided into direct systems, in which the producers sell directly to the consumers, and indirect systems, which involve middlemen (wholesalers and retailers). The non-trade network refers to various forms of subsistence production and intra-family exchange.
Subsistence farming in African cities: a response to economic crisis
In the early 1970s geographers attributed the existence of farming activities in African cities to the low level of urbanization in these countries and the poor integration of their urban centres. Twenty years later urban agriculture, particularly market gardening, has not only persisted but has been expanding steadily despite land pressure (especially in cities with populations of over one million). Urban agriculture, in this context, is defined broadly as including urban and peri-urban farming activities.
It is not known what proportion of households engaged in urban agriculture satisfy all or most of their consumption needs from subsistence production, and what proportion must make direct purchases from the market in that their production covers only part of their basic needs for major staples. There is evidence, however, that urban farming activities represent not only a means of generating additional household income but may also constitute a survival strategy for impoverished urban households, particularly during periods of acute economic crisis.
There is growing recourse to subsistence production and intra-family exchange in many African cities. The evidence clearly shows that this development is one of the responses to the deterioration in urban living conditions. Thus, the role of intra-family food exchange in the supply of food to the urban population needs to be analysed from the perspective of the survival strategies adopted by both rural and urban households. In fact, for a long time, food products have moved in both directions between rural and urban areas: from the village to the city at harvest-time and from the city to the village during lean seasons and poor harvest periods.
Trade networks and supply of farm produce to cities
Private marketing systems for farm produce have been described as flexible, efficient, highly structured and well organized (Yung, 1983; Couty and Barris, 1977; Arditi, 1975, revised 1981 and 1983). They have proved capable of ensuring supplies to large urban areas without major interruption, even under adverse conditions. These systems are continually adapting to changing urban food demands and have influenced significant changes in farm production systems. Private marketing systems are no longer perceived, as they were in the 1970s, as a factor in rural impoverishment but rather as playing a key role in determining the structure of incentives in the rural economy.
The survival of direct networks
Direct sales from producers to consumers can still be seen in many African cities. The role and size of such networks vary considerably, however, depending on the product, cropping season, type of urban market and level of development of the marketing sector in the country. This network primarily involves produce from urban and peri-urban market gardens (mainly fresh vegetables but sometimes other food crops). The production areas are seldom located more than 30 kilometres from the city and the produce is usually sold by farmers and their wives at district markets and very rarely in central markets. Also, door-to-door sales are made in suburban and peri-urban neighbourhoods located near the production areas.
Although individual farmer-traders account for a marginal share of the market, the overall volume of produce traded by this group is often substantial. For example, according to Chaleard (1988), direct sales by the wives of growers accounted for over one-third of the supply of fresh cassava in Bouaké.
Indirect networks: their role in urban supplies
Despite the agricultural and food crises that compromised the food security of the rural population in many African countries, it has been observed that private marketing networks have a substantial long-term capacity to ensure food supplies to cities with growing populations (Guyer, 1991; Leplaideur and Moustier, 1991). Supply, however, tends to be hampered by production uncertainties and constraints in the marketing system. Importation of staples, particularly cereals, is therefore encouraged by policy-makers primarily to mitigate the social costs associated with shortfalls in urban food supply and the consequent related rising cost of food, especially for the poorer urban consumers.
In most Sahelian countries, state-owned marketing boards accounted for only a marginal share of the market in locally produced cereals. Most of the food trade by these boards involved imported maize, sorghum and rice. Therefore, the vast majority of urban consumers rely on private marketing networks for their food needs, even during a crisis. In general, state intervention in marketing systems tends to create more disruptions in food supplies than drought, flood or war. For example, the supply of cereals to N’Djamena remained relatively stable in spite of the civil war that transformed the city into a battlefield (Arditi, 1993). There are also numerous examples of cases where the survival of large sections of the urban population (especially the poor and vulnerable) can be attributed mainly to the capacity of the private sector to organize parallel supply networks that complement or even replace food ration systems organized by the state.
Private supply networks have thus succeeded not only in ensuring the regular supply of staples (cereals, tubers and starchy crops) to cities, but also in adjusting to changes in this demand through the development of low-cost catering facilities as well as the expansion of small-scale agro-processing and market gardening activities.
Specific trade functions
There is little or no involvement of food traders in upstream production, although there are a few cases of “absentee farming”, especially in the Sudano-Sahelian zones, primarily for subsistence purposes. On the other hand, producers in areas poorly served by traders sometimes group together to buy or hire a truck for transporting produce to urban areas in order to avoid the bottlenecks in the wholesale network. Such cooperative efforts tend to fail, however, except in situations where the operator becomes a farmer-trader specializing in the transport and sale of produce from his own and other farms.
Downstream food supply and distribution involves retailers as well as small-scale agro-processors, millers and operators of various types and sizes of restaurants. The role of wholesalers in the supply and distribution process includes undertaking exploratory surveys on supply sources, purchasing and gathering of produce as well as collection, transport, and sale of the produce. Each of these activities may be undertaken by a number of relatively specialized agents, or all of them by a single agent. The transport of produce, in particular, is usually undertaken by a transport agent.
Organization of trade networks and dissemination of market information
The way market information is collected and disseminated significantly influences the organization of different supply networks. Information on production, quantity and quality of the produce demanded and road conditions is essential for medium- and long-distance trade. Bredeloup (1989) stresses that “simply being present in the distribution chain is not enough to ensure precise and up-to-date knowledge of the situation. Each link in the chain holds partial and somewhat asymmetric information”.
In effect to obtain access to information, an agent has to either move physically along the entire marketing chain or employ specialized agents. This is why urban itinerant traders usually take advantage of relationships formed through marketing networks, transit routes and ethnic linkages. They sometimes form groups specializing in certain supply networks for specific towns, regardless of the product in question.
Supply networks can be organized in one of two ways to enhance access to market information:
City supply systems are characterized by the coexistence of different types of chains and networks, although it is not always possible to define their precise ramifications in time and space, or the respective relationships involved, i.e. competition, complementarity, dependence or domination.
Because of the large and growing number of individual operators, the food trade in sub-Saharan African countries appears to be open and competitive, despite certain market imperfections. The apparent competitive structure of the FSDSs can be attributed to the relatively small trade margins, the limited volumes handled by most urban traders and the rather marginal capital outlay required. Current research, which analyses trade strategies and the role of actors, has revealed that many traders adopt non-competitive practices in order to mitigate market risks and instability.
In fact, food supply and distribution tends to involve very high levels of risk and uncertainty. There are upstream collection risks caused by unstable produce supply from numerous spatially dispersed producers, lack of information on product availability, and insufficient, irregular and expensive transport services. Downstream risks encountered by traders involve price and demand fluctuations caused by various unpredictable factors as well as disabling institutional factors such as inappropriate regulations and excessive and often arbitrary taxes. Furthermore, most traders lack sufficient capital and have virtually no access to credit. These constraints influence the behaviour of traders and affect their choices and trading strategies, which are similar regardless of the product or type of organization.
Such strategies include promoting personal relations to increase customer loyalty, and the use of formal and informal contracts and advance orders to regulate supplies. Interlocked transactions and informal credit schemes are also used to secure supplies and guarantee the sale of merchandise. Traders’ associations are often formed to restrict competition.
Research carried out by the Institute for Research in Tropical Agriculture and Food Crops (IRAT) and the International Cooperation Centre for Agrarian Research for Development (CIRAD) on vegetable pipelines in Central Africa is particularly interesting in this context.2 The vegetable trade is characterized by substantial fluctuations in produce flows and prices and by relative ease of entry because of the low initial capital required. Trader-collectors therefore tend to engage in practices that restrict competition so as to maintain a fairly sizeable and regular level of activity. Selective access to credit networks for new entrants is one such practice.
A number of studies on the cereals trade in Sudano-Sahelian region also indicate the existence of practices by urban wholesalers that contrast sharply with the generally accepted view of a competitive trade system (Saul, 1985; Wilhelm, 1994; Arditi and Grégoire, 1993). Urban wholesalers usually belong to communities united by strong social and ethnic bonds. This promotes stability in their activities but it also raises entry barriers that limit competition in the FSDS.
The proliferation of casual middlemen can create the impression that the food trade is open and competitive, but the high failure rate among new entrants clearly shows that the economic environment in which actors operate is largely determined by the social system. This has implications for the process of price formation. Prices may not necessarily be formed by the interplay of supply and demand, as they are influenced by power relations and informal institutional factors such as trust between producers and traders upstream and between wholesalers, retailers and urban consumers downstream.
Wholesalers
Most wholesalers in urban markets are small-scale wholesaler-collectors dealing in limited quantities of goods. Surveys conducted during this study in Ouagadougou and Bobo-Dioulasso indicate that most of the wholesalers in the cereal trade, particularly those dealing in dry produce and tubers, handle between 200 and 300 tonnes per year. A small number (less than 10 in the two main cities) handle about 1 000 tonnes per year.3 A similar situation prevails in the grain market in N’Djamena, where only 6 out of about 70 wholesalers handle between 600 and 1 000 tonnes per year, while the majority handles under 300 tonnes.
The scale of operation also varies widely from city to city as shown by a survey of wholesalers in Côte d’Ivoire and Madagascar. While in the Abidjan wholesale markets traders in dry produce and starchy crops usually handle between 0.5 and 0.8 tonnes per day, wholesaler-shippers in Bouaké, the central point for countrywide redistribution of farm produce, handle between 2 and 3 tonnes per day. In Madagascar, wholesalers in the Isotry market rarely handle over 0.4 tonnes per day, compared with those in markets at Andravoahangy and Anosibe who handle between 0.8 and 2 tonnes per day.
The situation is similar in the case of wholesale markets for perishable (horticultural crops) and semi-perishable food produce (cassava, starchy crops). Although wholesaler-collectors of horticultural crops in very large markets, such as that of Dakar, handle about one tonne per day, most wholesalers handle between 300 and 500 kg per day.
For most urban traders, high stock turnover is often of prime concern. They seldom engage in produce collection and either depend on collectors or buy direct from farmers who bring their own produce to market. This is mainly because urban traders, especially the wholesalers, usually consider collection time-consuming and expensive. Also, most traders lack transport and storage facilities and therefore do not have the capacity to effectively manage loss due to deterioration of produce quality.
Women carry out most of the food trade in sub-Saharan Africa. They dominate in particular the collection process, which involves the search for produce, bulking, transport and distribution to wholesalers and retailers in urban areas. There are high risks associated with these activities mainly because of the large number of small “casual” operators competing for produce from many small, widely dispersed producers and also because of lack of storage, transport and other facilities. Also, the collectors usually lack up-to-date information on demand. Their financial constraints are compounded by the fact that most of their customers (especially the urban retailers) often lack sufficient liquidity, and they may be required to pre-finance produce purchase downstream. These problems limit the scale of their operations, reduce trade margins and lead to increased uncertainty with regard to access to regular supply of produce.
It is clear from the above that wholesale food trade in sub-Saharan Africa has been hampered by the fact that most wholesalers lack transport facilities and are therefore dependent on small-scale collectors. Inadequate trading capital limits their ability to invest in transport, storage and other facilities that would enable them to hold quality stocks over longer periods. Consequently, high stock turnover is their prime concern while trade margins and productivity are relatively low.
Retailers
The major constraint faced by the predominantly women retailers is inadequate trading capital which limits the scale of their operations and obliges them to enter into restrictive informal credit arrangements that weaken their bargaining position in relation to wholesalers. The urban transport network also constitutes a major problem for retailers and contributes significantly to increased distribution costs, as in most major African cities the transport system tends to be unsuitable for the small quantities of produce handled by most retailers. Consequently, a substantial proportion of the produce is handled by porterage, which further limits the quantities marketed and raises unit distribution costs. Two related problems tend to further reduce the trade margins of retailers: excessive competition from the large number of small operators (particularly the unregulated hawkers); and, the limited buying power of their predominantly poor clientele.
It is quite striking that parallel networks engaged in unofficial cross-border trade (smuggling) account for most of the supplies of manufactured goods in urban markets in sub-Saharan Africa. This situation is partly attributable to the fact that the distribution networks formerly established by national industries as part of the import substitution drive (especially in textiles and food) were not able to adapt prices and quality to the needs of poor households.
The supply of general goods and imported food staples was dominated for a long time by highly structured and organized large-scale business enterprises. These enterprises continue to control a major share of the market, however, growing numbers of new operators have entered the supply networks for manufactured goods since the 1980s. These new entrants are mainly those who have been excluded from rural and urban productive systems as a result of the implementation of adjustment programmes.
In recent years the supply and distribution of imported staple foods has provided a great opportunity for rapid accumulation of wealth in Africa. Consequently, the sub-sector attracts substantial investment and has the largest concentration of storage, warehousing, transport and other facilities, which tend to be located in well-planned, well-serviced areas. In addition, property rights to these facilities are usually quite clearly defined, thus guaranteeing their permanence and minimizing legal encumbrances, as opposed to the situation found in the wholesale sector for domestic farm produce.
A study by Labazée (1993), however, revealed that the competition that arises between the different official and unofficial supply networks has significant repercussions on the division of revenue for cross-border activities both upstream and downstream. This situation also creates difficulties in estimating trade margins with regard to the distribution of manufactured goods. Hence, control of this trade and related revenues has been the focus of concern and the cause of major conflicts between large-scale traders and government officials.
1.2.1. The place of markets in the urban trade sector
1.2.2. Defining features of urban markets
1.2.3. Location and distribution of markets in cities
1.2.4. Role of markets in urban supply systems
1.2.5. Functional relations between markets and trade support activities: Importance of transport in food supply and distribution
1.2.6. Market conditions: Technical, hygienic and economic diagnosis
1.2.7. Development of extended trading centres
Trading activities concerned with the supply and distribution of food in African cities consist of the following organizational forms: the modern large-scale distribution sector, the large-scale import-export sector, the formal small-scale distribution sector, and the informal urban trade sector.
Modern large-scale distribution sector
This sector consists basically of branches of multinational trading companies. Since the 1960s companies have operated in two main spheres. The first involves importation and distribution of capital goods (including farm equipment, spare parts, building materials, vehicles) for which the state is the main customer (public sector organizations and major development projects). The other involves the distribution of consumer goods through supermarkets patronized mainly by the middle and upper classes in towns and cities. This sector has encountered major difficulties in most African countries partly because of the economic crisis but also because of the increasingly fierce competition from actors engaged in the parallel unofficial cross-border trade.
Import-export sector operated by network of large-scale traders
This sector currently supplies the populations of African towns and cities with most of their needs in staple food and manufactured goods. In Sudano-Sahelian countries, traders in this sector play a decisive role in the marketing of local cereals. The sector developed from the old, long-distance trading networks, which shaped the organization of trade in Africa in the pre-colonial era.
The import-export sector originally emerged to facilitate exchange between complementary production zones (forest products such as kola in exchange for Sudano-Sahelian zone products such as dried fish and livestock). The trade grew during the colonial era in response to the demands of troops and new towns and cities for food supplies (cereals, meat and oilseed). The African traders usually entered into the trade as agents sub-contracted to collect local produce (karité, groundnuts, palm oil, etc.) for major multinational trading companies or for Lebanese and Syrian traders. Many of them later expanded their activities and became independent exporters.
Most of the existing large-scale traders are descendants of the old merchant families and are organized into highly structured networks based on kinship and clientele relations. The “relational capital” is a key element in their trading strategies. The spreading of risks across several activities (farm produce trade, transport, importation of general goods, etc.) is another defining feature of their business strategy.
Their trading networks usually span a wide geographical space cutting across regional, national and even continental boundaries (Labazée, 1993, op. cit.). They usually make use of both official and parallel networks spanning several countries, “taking advantage of the differences in economic policy in various countries, their membership in different monetary areas, and differences in price and availability of such goods on either side of frontiers” (Egg et al., 1988).
Formal small-scale distribution sector
This sector includes all officially recognized shops in town and cities, for example, those listed by chambers of commerce, such as bakers, hardware sellers, bookshops/stationers and food traders. Most of their customers are formal sector employees. Although smuggling and other illegal trading activities tend to hamper their operations, they suffer even more acutely from the economic crisis, particularly as it affects urban employment and household incomes.
Large informal trade sector
The majority of the urban population obtains its supply of manufactured goods, farm produce and major staples from neighbourhood and central markets. Trading activities in these markets revolve around the sale and distribution of manufactured and imported goods and local food produce.
Over the past ten years, trade in manufactured and imported goods has recorded the most dynamic growth in most African economies, with traders maintaining very high stock turnover. Traders in these goods tend to occupy well constructed markets located in planned public spaces. The food trade, on the other hand, is dominated by informal traders operating in marketplaces that lack basic facilities and are characterized by such problems as poor access, over-crowding and unsanitary conditions. The majority of these traders are women, most of whom sell on streets and in open spaces.
Urban markets can be classified according to areas served, facilities and services provided and types of products sold, as outlined below.
Markets serving cities or urban districts
Markets that serve major towns and cities are often historic markets located in long-established settlements. Even when they are no longer located in the centre of townships, they are often referred to as “central markets” and usually have a large number of traders with a wide range of goods and services. Some of these central markets have a network of customers from areas extending well beyond the regions, or even the country, in which the town or city is located.
District markets (sometimes called secondary markets) usually serve a population of about 10 000, while municipal or intermediate-sized markets serve up to 100 000 people.
Official, administered or organized markets (as opposed to street or spontaneous markets)
Organized markets are located at sites officially set aside for trading. They usually have some form of organizational structure and some basic facilities such as roofed sheds or stalls, warehouses, water and toilet facilities. These facilities are usually provided and maintained by local authorities. Some so-called organized markets emerge spontaneously and are usually not provided with facilities by local authorities but are nonetheless officially “recognized”. The main difference between organized and spontaneous markets regards the payment of taxes and fees which is required by traders in organized markets, while traders in spontaenous markets pay no such fees.
Most district markets are spontaneous markets and located on main streets and in other “unauthorized” places. The traders often have no permanent stalls or sheds and although the authorities may be aware of their existence, they are not required to pay any fees or taxes for the use of the site and are not entitled to any services. In most cases local authorities keep a list of only the markets where traders pay fees and taxes. It is important that these lists are revised to take account of the emergence of spontaneous markets not only in terms of their functions and the public facilities required, but also because of their potential to increase local revenue.
Mixed markets and markets specializing in single products
Most urban markets are multipurpose or mixed markets carrying a range of goods of varying quality and price in order to satisfy the demand from customers of different socio-economic backgrounds. There are some markets, however, that specialize in the range of goods and services they provide. Local authorities usually create such markets in an attempt to concentrate particular trading and service activities at selected sites, often in order to meet planning objectives such as reducing the nuisance factor involved in the activities of traders and artisans. In many cities the specialized markets are being steadily pushed further away from city centres, thus increasing the cost of their goods and services. This trend does not, however, affect spontaneous markets at “bus and lorry stations”, which usually specialize in the provision of catering services.
Village-type urban markets
In the process of expansion some major towns and cities absorbed independent villages with historically active markets. Despite the urbanization of these village communities, the markets usually retained their historical (rural) traditions. In particular, village markets tend to be held periodically, while most urban markets operate daily.
Day and night markets
Some urban markets are more active during the evening or at night than during the day. An example is the Farakan market in Bobo-Dioulasso, which takes over from the central market in the evening (after 7 p.m.). While during the day only about 100 traders operate in this market, there are 1 000 traders at night offering farm produce and a wide range of manufactured goods.
Geographical distribution
The geographical distribution of markets tends to vary considerably, depending on the individual characteristics of each town or city and the level of urbanization and planning policies. It is also affected by the possibility to facilitate the ease of movement of goods and traders and is therefore closely linked with the development of transport and communication infrastructure.
Determining the spatial distribution of markets is not simply a matter of locating markets on a map. An analysis of market types and their spatial distribution in urban areas reveals significant imbalances in urban market infrastructure. It is quite clear that in most cities the concentration of trading activities in a single market constricts the development of secondary markets.
Population served
For most markets in sub-Saharan Africa there is no reliable data on the population served. This information is, however, vital in order to forecast the future demand for trading facilities. The ratio between the trading area (in the market) and the number of inhabitants served provides an indication of the adequacy of the existing services in meeting the needs of the urban population. Assuming that a base ratio of 15 m2 per 100 inhabitants is generally satisfactory in terms of trade services provided, it is possible to estimate the area of land needed for markets in the future as well as deficits in the level of existing services provided.
The saturation of many markets and the proliferation of unauthorized street hawkers and spontaneous markets are clear indications of insufficient market space in some urban areas. On the other hand, this situation can also be attributed to economic stagnation. It is therefore important to distinguish between the need to expand market infrastructure in order to keep pace with urban population growth and the need to alleviate pressures arising from economic stagnation. Market infrastructure expansion aimed at responding to the latter will only lead to further reduction in average trade volumes, and as a result marketing efficiency will decline and per unit distribution costs will rise.
Administrative and planning purposes
There are considerable differences between urban districts in terms of the allocation of space for markets. In most cases historical factors as well as differences in approach to urban development influence these decisions. Large, well equipped markets serving major sections of the city tend to be found in the old central districts. Peri-urban areas and suburbs further away from the city centre usually have few, poorly equipped organized markets, most of which are spontaneous street markets of varying sizes. There is also a tendency to decentralize specialized markets away from the city centre towards peri-urban and suburban areas.
Although this pattern of distribution of market infrastructure is bound to change as towns and cities grow, it does have an affect on market management and the amount of revenue generated for local authorities. Quite often local authorities cannot meet the demand for improved market infrastructure in growing suburbs mainly because the markets in those areas do not generate sufficient revenue from traders. Under such conditions, property rates may be a relatively more reliable source of revenue than the fees and taxes paid by traders. Local authorities may find it more advantageous to issue permits to absentee traders who build permanent structures which are often used as warehousing facilities rather than for trading purposes, thus undermining rather than promoting economic activity and efficient supply and distribution.
The role markets play in the supply and distribution of food in cities varies considerably according to the type of food involved (unprocessed produce or manufactured goods). On the basis of the functions they perform in food supply systems, two major types of urban markets can be distinguished: supply/redistribution markets and consumer markets.
Supply and redistribution markets
Supply and redistribution markets are mainly wholesale markets, although retail activities also take place there. They are usually located at strategic points on the main supply routes, but socio-economic and political factors may also influence their growth and development. The wholesalers obtain their merchandise from areas that extend well beyond national borders and their clientele include local and foreign retailers as well as urban consumers. Their role consists basically in meeting the needs of the urban consumer, but they also tend to act as central collection points from which other markets in distant locations receive their supplies.
Four main features characterize major wholesale marketplaces:
According to the proximity of production zones, wholesale markets often specialize in certain types of produce. In most cities in sub-Saharan Africa, there are a number of “specialized” wholesale supply and redistribution markets scattered in various locations. This situation needs to be taken into account in attempts to promote new wholesale marketing systems in urban areas.
Other distinctive features of urban supply and redistribution markets include the following:
Consumer markets
This category includes district markets, both official and spontaneous, specialized markets, and bus-station markets, which are all retail markets.
In analysing the functional relations between markets, it is important to take into account the core trade support activities that facilitate the supply and distribution of food in cities. These core activities include packaging, storage, preservation, and processing as well as transportation of food supplies.
The transport and communication networks play an important role in linking markets to one another and in enhancing the performance of the other core support activities. Projects and programmes aimed at improving market infrastructure should not overlook factors such as the provision of required road networks, the availability of appropriate vehicles (trucks for collection, vans and lighter vehicles for redistribution in urban areas) as well as the provision of parking and loading facilities. All of these factors are essential for improving the efficiency and lowering the cost of urban food supply and distribution.
The rapid urban population growth and the expansion of informal sector activities owing to economic stagnation have resulted in a sharp increase in the number of traders (especially micro-retailers and street hawkers) in most African cities. The increase in trading activities, however, has not been accompanied by any significant increase in the availability of trading facilities and infrastructure. These factors are in large part responsible for the current saturation, disorganization and unhygienic conditions of existing facilities, as well as the increase in the number of hawkers and other micro-retailers occupying the streets.
Most markets suffer from major deficiencies in terms of the provision of basic infrastructures (including drainage, water and electrical power) and from irregular maintenance of the existing facilities. This is usually because markets developed spontaneously without any official sanction or commitment on the part of the authorities to provide basic infrastructure or because local authorities lack the required financial and organizational capacity to maintain or improve the existing facilities. The most obvious organizational dysfunctions at the major markets are the concurrence of wholesale and retail activities and the inefficient grouping of products.
All of these technical, hygienic and organizational bottlenecks represent significant health and safety risks to both traders and customers.
In most African cities, the most common feature of trading activities is that they tend to be concentrated in marketplaces and adjacent streets in city centres. Another striking feature is that the supply and distribution of domestic farm produce is less prominent than the generally more profitable trade in manufactured and imported goods. The over-concentration of trading activities in city centres inhibits the development of an efficient distribution network involving active secondary district markets, which are less attractive because of low trade volumes.
Some administrative interventions have also contributed to the acute imbalance in the provision of market infrastructure and therefore need to be reoriented as part of an overall strategy to improve the capacity of the market networks to ensure efficient food supply and distribution.
1.3.1. Prevailing conditions and required actions
1.3.2. Wholesale activities in urban areas: Places and modes of operation
1.3.3. Supply and redistribution functions of wholesale markets
1.3.4. Establishing new wholesale markets
Wholesale markets are clearly vital to the development of a modern commercial sector in many African cities. Promoting efficient wholesale marketing systems, however, can only be undertaken if decision-makers have a clear understanding of the role and functions of such systems. Although the problem of ineffective wholesale marketing systems is widespread in Africa, differences in the backgrounds of towns and cities imply that the appropriate solutions would also differ. An analysis aimed at identifying the particular problems that need to be addressed in promoting a given wholesale market should include the following information:
The answers to these questions will also provide a basis for evaluating projects that aim to improve urban food supply and distribution. Quite often official policies are dictated more by environmental concerns, such as a reduction in pollution and congestion levels, than by any conviction that the establishment of a wholesale marketing system is essential in improving urban supply systems. Although objectives based on these considerations may not be mutually exclusive, the desired effects and their political implications may be different. Hence, the objectives for any wholesale markets improvement need to be clearly defined.
The location and spatial distribution of wholesale marketing facilities in towns and cities usually depend on whether the types of goods distributed are local or imported. In most African cities, the wholesale distribution network for local foodstuffs is often widely dispersed throughout the city, while facilities for trade in imported commodities are concentrated in specific areas.
Local farm produce
There are significant differences in wholesale distribution for the various types of farm produce. Most of the wholesale distribution of fresh produce (mainly vegetables) and starchy crops (plantain) occur along main roads leading to cities and on streets near major markets; some wholesalers handling such produce may also be found in the markets. This situation is common to most cities in Africa, including Conakry, Abidjan, Bouaké, Bangui, Brazzaville and Dakar.
For fruits and tubers, the main distribution points in cities are usually large major lorry parks for haulage trucks (often situated near central markets). Wholesalers dealing in dry foodstuffs (cereals, pulses, tubers and in some cases fruits) usually operate in the central and secondary marketplaces or in commercial districts. They usually develop a dense network of warehouses in “specialized” districts located in the immediate vicinity of central markets.4 Land pressure and over-subscription of existing facilities at central markets have also contributed to a recent tendency to convert residential structures near markets into stores and warehouses.
The wholesale distribution systems for domestic food produce in most African cities are usually inefficient owing to the lack of basic facilities and the fact that traders tend to be widely dispersed. In addition the activities of traders contribute significantly to congestion and pollution in cities, which often lead the authorities to relocate wholesalers away from the central business districts of the city.
Box
1
Size of some wholesale markets in Africa and Madagascar
| Bobo-Dioulasso: a secondary city and major redistribution centre for fruit and cereals with a population of 300 000 in 1990 Wholesale activities in Bobo-Dioulasso are concentrated in two main markets: the Sikasso Cira fruits and tubers market and the Central market. Activities at the Sikasso Cira fruits and tubers wholesale market centre almost exclusively around redistributing food to Abidjan and some towns in Niger. Wholesalers account for a volume of about 70 000 tonnes of produce. The central market, where small-scale wholesalers of cereals and vegetables operate, supplies mainly local households. It handles about 30 000 tonnes of produce. In addition, about 60 000 tonnes of cereals destined for Ouagadougou and other towns in the Sahel also move through other wholesale warehouses in the city. N’Djamena: a medium-sized city with a population of 600 000 in 1991 Food wholesale activities in the Chadian capital are concentrated in the Grain market, which handles over 60 000 tonnes of cereals compared to 20 000 tonnes which pass through the Central market, although the latter is dominant in the supply and distribution of dry and fresh produce. Secondary markets such as Dembe and Choléra have also developed into major redistribution centres for fresh produce, cereals and other items such as fresh fish. About 45 000 tonnes of horticultural crops, fruits and tubers are handled by the four supply and redistribution markets in N’Djamena (80 percent of which is handled by the Grain market and the Central market). Antananarivo: a large city with a population of 1.1 million in 1991 Two major markets, Anosibe and Andravoahangy, are the main redistribution markets in the Madagascan capital. The Anosibe market developed spontaneously at an old bus station in the southwest of the city and currently accounts for about 100 000 tonnes of produce per year, of which 60 percent is perishable fresh produce (fruits and vegetables) and 40 percent is dry produce. Between 12 000 and 15 000 tonnes of fruits and vegetables are channelled through this market to markets at Toamasina and Majunga. Andravoahangy has become the major supply centre for dry produce (rice and pulses) for the densely populated northern districts of the city and suburban areas. This wholesale market also handles fresh vegetables produced in the northern and north-eastern market-garden areas and is a major storage and marketing centre for onions and garlic. It handles at least 20 000 tonnes of dry produce. The Isotry market, located near the railway station in the city centre, is officially the only wholesale market in the capital, but has lost most of its dry produce redistribution business to the other two wholesale markets. The Analakely market, which was the major redistribution centre in the 1960s, has also lost most of its wholesale business and currently handles mainly fresh vegetables (cassava leaves and European vegetables). Dakar: a very large metropolis with a population of 2 million in 1994 Dakar has several food supply and redistribution markets. The two largest, located in the Pikine district, are the Syndicate market and the Thiaroye Station market. The Syndicate market is a fruit market with about 200 wholesalers and over 1 500 sub-wholesalers; it handles about 260 000 tonnes per year. The Thiaroye Station market specializes in vegetables and tubers, with about 200 wholesalers and brokers handling an estimated 100 000 tonnes of fresh perishables per year. Both markets operate under extremely difficult conditions. Bouaké: a medium-sized town and an important redistribution centre for the sub-region with a population of 500 000 The wholesale market in Bouaké has played an important role historically in the distribution of food produce not only in Côte d’Ivoire but also in the whole of West Africa. In 1993 the market handled nearly 360 000 tonnes, two-thirds of which was destined for other markets. The construction of a new market was expected to increase the volume of produce handled to about 650 000 tonnes in its first year (1997) with only 100 000 tonnes for urban household consumption. More than one-half of the produce (in terms of volume) handled
by this market is yam, making it the largest redistribution centre for this tuber
in the sub-region. Dry produce like maize and groundnuts account for about one-third
of the total volume of produce handled by the market. It is also the main storage
and repackaging centre for Kola nuts being exported from the south to neighbouring
countries in the north. |
Wholesale trade in imported general goods and staples tends to be concentrated in city centres. Clear differences exist in the scale of operations of wholesale traders in imported general goods and staples.
Large-scale importer-wholesalers usually have warehousing facilities either concentrated in particular business districts near central markets (for example in Dantokpa-Gbogbanou in Cotonou and Madina in Conakry) or scattered throughout the city. For most of these wholesalers, particularly those in the Sahelian regions, high stock turnover constitutes a major strategic objective in the attempt to keep storage costs low. Since maintenance costs for warehouses are rather low, wholesalers - especially those engaged in unregulated re-export to neighbouring countries - tend to invest in large warehousing facilities.
The high concentration of facilities in particular business districts constitutes a major problem, particularly for new entrants. This has contributed to various initiatives to decentralize wholesale marketing systems in cities, for example, Conakry in 1991 and N’Djamena in 1992. Such initiatives, however, are often not sustained by the authorities.
Small-scale wholesalers operate in the same places as the domestic staple food traders, i.e. in marketplaces, commercial districts and sometimes on streets and sidewalks. The constraints they face are similar to those of the wholesalers handling local food produce.
End wholesale markets
Most of the wholesale marketing function is performed by end wholesale markets which cater mainly to small-scale retailers (mostly women) as well as to direct consumers, especially housewives. The produce is usually sold in relatively small quantities corresponding to the trading capacity of most retailers. Most farm produce wholesale markets also perform a secondary onforwarding function. The extent to which this function is performed depends on the product, the market and the role of the particular city in the inter-regional supply systems.5
Consolidation for on forwarding
Wholesale markets in some towns and cities perform a strategic consolidation and onforwarding function for local farm produce in long-distance trade (in the interregional and international supply and distribution networks). Wholesalers in such markets usually handle much larger volumes of produce for onforwarding than for local urban consumption. This is the case at Bouaké in Côte d’Ivoire and, to a lesser degree, at Bobo-Dioulasso in Burkina Faso. The activities of the traders in these markets (like those at the Sikasso Cira market in Bobo-Dioulasso) differ significantly from the activities of small-scale wholesalers in the central market and adjacent streets who supply the needs of consumers in the city.
Role of importer-wholesalers in onforwarding
Large-scale food importers or distributor-wholesalers play a key role in onforwarding activities. Most of their customers are national and foreign wholesalers and sub-wholesalers. They often rely on long-haul trucks that cause considerable traffic congestion in cities. Local authorities have developed plans and projects to ease these traffic problems; however, few have been implemented to date, largely because of a lack of financial resources. Consequently, many of the authorities have adopted short-term measures to limit the number of private warehouses in city centres. Others have also provided various incentives to encourage relocation to specific zones and have taken stricter measures to enforce traffic and parking regulations.
It has become quite apparent that in order to improve the efficiency of food supply and distribution systems in large African cities it is necessary to actively promote new wholesale marketing systems. The economic benefits to be derived have increasingly been recognized6, so that the question is no longer whether or not to establish such systems but rather how to do so. In promoting efficient wholesale marketing systems a number of factors must be taken into consideration, as discussed below.
Choice of site
The establishment of new wholesale markets outside city centres may be attractive for local authorities because of the relatively minor difficulties in acquiring land. In addition it would provide a response to the traffic congestion and pollution often caused by food supply and distribution activities in cities. However, empirical evidence from a number of African cities indicates that plans to locate new food wholesale markets away from city centres and very busy commercial districts are doomed to failure owing to the serious constraints in the existing supply and distribution network.
In this context, there is considerable disagreement over the appropriate strategy to adopt in promoting new wholesale marketing systems. Some experts advocate a single site located at a minimum distance from the main retail markets so as to reduce the transport component of distribution costs within cities. Others argue that “the impact of the market on traffic is a more decisive [consideration and that] a site [located at] the outskirts of the city would ease access [and compensate] for the additional cost to retailers” (DCGTX, 1988). Two main factors need to be taken into account in making any particular choice:
The impact of the new system on intra-urban transport and distribution costsIncentives to promote specialized wholesale marketsTransport costs tend to be the major expenditure item in intra-urban FSDSs. If wholesale markets are established at some distance from the city centre, initial distribution costs will increase significantly. These additional costs can only be offset by a significant increase in the volumes handled by retailers, which is quite unlikely in the near future because of acute working capital constraints.
It should be stressed that local planning authorities in most African cities lack reliable information on the real cost of food supply and distribution. This situation encourages the adoption of ad hoc measures in attempts to improve wholesale marketing systems (DIAGONAL, 1996). It is evident that complete information on this aspect of urban supply systems is essential for planning improvements.
Unauthorized parking and loading operations in city centres
The establishment of new wholesale markets in areas located far from city centres and business districts would lead to an increase in unauthorized parking and unloading of goods near retail markets, thus recreating the problems that were to be eliminated by the new arrangement. Therefore, in order to improve rather than worsen the working environment of wholesalers and traders, it may be preferable to reorganize wholesale activities at existing locations (in city centre). Where relocation is necessary, the new sites should be as close as possible to the central business districts.
Centralization of wholesale trading activities in perishable and semi-perishable produce should be a priority since the volumes marketed in cities with a population of over one million fully justify this. In smaller towns (especially those in Sudano-Sahelian zones) where local cereals constitute a major staple, wholesalers handling dry foodstuffs and fresh produce could be grouped at the same place. Many of these wholesalers currently operate in warehouses located in “specialized” districts and should therefore be encouraged to relocate to wholesale markets with improved security and better operating facilities.
The grouping of various wholesalers at specific locations needs to be organized in stages. It is generally more appropriate to group together operators with similar organizational forms and operating systems rather than those in widely different sub-sectors. It is also important to take into consideration the size and geographical features of the town or city concerned as these factors influence the response of wholesalers to the grouping process. The extent to which coordinated and effective efforts are made to convince wholesalers of the benefits and incentives for relocating to the planned facilities will also influence the response of the wholesalers to the grouping process.
Management and coordination
Although a well-organized wholesale market is essential for improving the efficiency of urban FSDSs, its medium- and long-term benefits are generally realized as the network and behaviour of operators change and as new entrants appear on the market. These changes cannot be brought about unless coordinated efforts are made to educate various stakeholders. Since the cooperation of traders is essential to the success of new wholesale markets, they and other key stakeholders must be consulted from the inception of any improvement projects with regard to location, facilities, services, market operating rules and management structure.
The management and administrative structures adopted for the new wholesale markets should involve wholesalers in decision-making. The markets should also have management autonomy in order to minimize interference by local and central government authorities. Privatization may be explored as a possible means of enhancing efficient management of the markets. This solution, however, depends on the willingness of the private sector to take the risks involved.
