“In the current economic recession, it is odd that state governments would decide to cast people out of an innovation they have made to help themselves, and the economic prospects of their states, without offering them any alternative solutions in return.”
In a recent popularity poll, a majority of 36.1% believed Governor Akinwunmi Ambode of Lagos State to be Nigeria’s best performing governor. All the way back in second place with 25% of the votes was the Anambra State governor, Willie Obiano. Among Lagosians especially, Mr Ambode is a popular man. If the governor’s recent policies are anything to go by, it would seem that Governor Ambode is concerned with keeping his high approval ratings.
Realising that his popularity is tied to noticeable improvements in the beautification of Lagos, Governor Ambode has addressed the need for more streetlights and traffic decongestion. He has also implemented a law banning street trading and ‘illegal’ markets. In the last few months, dozens of road-side shops and small businesses have been demolished in the promise of urban renewal.
The law comes under the Kick Against Indiscipline (KAI) Brigade—a standalone paramilitary agency specifically set up to arrest street traders and keep the environment clean. But the law is not new, and precedes Ambode’s tenure as governor. The technical illegality of street trading, and its enforcement by the KAI Brigade, has been ongoing since 2003. What Ambode has done, however, is to re-state the Lagos State Street Trading and Illegal Markets Prohibition Law of 2003, and to prescribe higher financial punishments for offenders. The law is also being more aggressively implemented under Ambode’s authority.
If hawkers are shut down, many established companies will suffer loses. Loses that will have a knock-on effect on state tax revenues.
There are, of course, a few who will take it as a happy sign of ‘development’ that street trading is being clamped down in Lagos State. But far more are not pleased; and even more, are angry. In late July, several buses were damaged and a young hawker was killed by an on-coming truck as he tried to flee KAI officials attempting to forcefully implement the law.
Within the Nigerian national context, street trading – especially hawking, whereby young traders sell light wares in street traffic – is generally perceived as a social problem. But while some states have expressly banned it, for example in Lagos and Kaduna states, others have sought to regulate where and how the trade can productively occur. Cross River State, for example, has taken the more difficult and thoughtful step of enabling many young working-class persons to remain in gainful employment. An employment from which the state is also able to benefit.
In Lagos, informal and street trading makes up the social and economic reality for a vast number. Street trading and hawking compose critical elements of the informal economy. The state government’s attempt to eradicate them is, in reality, an incomprehensible battle against informal business.
Eighty-six visitors enter Lagos every minute of each day with no intentions of leaving
According to the National Bureau of Statistics (NBS), in 2015, Nigeria’s informal sector activity was worth N38 trillion and accounted for 41 per cent of the national GDP. Street trading and hawking alone compose 10 per cent of the national GDP. By itself, Lagos has the highest informal sector activity at 8.9 per cent, followed by Kano with 4.8 per cent. It makes little sense that of all Nigeria’s thirty-six states, Lagos would be the one most stringently clamping down on a sector so important to its socio-economic well-being.
The domestic economy of Lagos State appears to be more robust than many of the other states in Nigeria’s federation. After all, if Lagos were a country, it would be Africa’s seventh largest economy; ahead of Kenya and Cote d’Ivoire. Compared to the other states, Lagos depends far less on handouts from the federal government by internally generating up to 75 per cent of its own revenues.
if Lagos were a country, it would be Africa’s seventh largest economy
Perhaps on such a performance then, Lagos could do away with economic activities like street trading. However, street trading and small business activity are of paramount importance to Lagos’ economic strength. Dr. Yemi Kale, Nigeria’s statistician general, has noted that informal trading accounts for a larger portion of the national GDP than does Nigeria’s largest export, crude oil. In 2015, oil and manufacturing contributed a mere 8.06 per cent and 9.09 per cent, respectively, to the national GDP.
Despite its obvious economic importance, the policies of states are daily concocted to frustrate the efforts of traders under the pretext of ‘city renewal’. Those who favour the ban will often cite evidence of crimes perpetrated by hawkers or those pretending to be hawkers. Or the case of informal street shops that operate without the necessary permits. But such reasoning fails to consider that the ban on street trading leaves many with no economic alternatives and may make criminals out of people who were previously in productive employment.
state mandated bans on street trading fail to see that hawking is the now ubiquitous product of failed socio-economic governance, and not the other way around.
Many of the issues that state policy makers believe are presented by street trading are mythical and poorly-considered. There is no doubt that street trading is not the most efficient way to do business. It is full of risks, both to the seller and to the buyer; and it is neither convenient nor is it luxurious. Many hawkers will be unlikely to escape poverty by means of street hawking alone; and in Nigeria, hawkers are most certainly among those living below the poverty line.
Governor Ambode recently stated that of the 123, 840 people who visit Lagos everyday, eighty-six visitors enter every minute of each day with no intentions of leaving. The policy to vigorously enforce the law against informal trading activities may very well connect with the aim to decongest the state. Many of those who relocate to Lagos end up in informal trades.
What state-mandated bans on street trading fail to see, however, is that hawking is the now ubiquitous product of failed socio-economic governance, and not the other way around. What is critical to note, is that the various state bans on informal trade do not come with any economic rehabilitation programmes for those who can no longer trade. In the current economic recession, it is odd that state governments would decide to cast people out of an innovation they have made to help themselves, and the economic prospects of their states, without offering them any alternative solutions in return.
According to the National Bureau of Statistics (NBS), in 2015, Nigeria’s informal economy was worth N38 trillion and accounted for 41 per cent of the national GDP
The law banning street trading is unrealistic, and it is economically unsound. In Nigeria, street trading has a massive value chain that touches almost every business and non-business activity. The products and services being sold informally are not disconnected from the formal sector. In fact, a great number of informal sales, on any given day, will constitute a significant proportion of turnover for many manufacturers in the formal sectors.
If hawkers are shut down, many established companies will suffer loses. Loses that will have a knock-on effect on state tax revenues. It is not only hawkers who lose under state policies that are anti informal trade.
Olusegun Sotola is a Nigerian. He is a s senior researcher with the Initiative for Public Policy Analysis, a Nigerian think tank based in Lagos.