2. Operation and organization of large urban markets

2.1. Market installations and facilities
2.2. Market management and types of occupancy by traders
2.3. Traders and economic activity
2.4. The dynamics of spatial distribution of traders

2.1. Market installations and facilities

2.1.1. Public facilities
2.1.2. Number of traders in major markets
2.1.3. Condition of existing sales and storage facilities

2.1.1. Public facilities

Public market facilities in most African cities tend to be old and dilapidated or relatively new but inefficient structures with inadequate stalls for traders. Most of the central markets built during the colonial era lacked adequate storage and other trading facilities. The more recent market facilities built during the late 1960s and early 1970s were intended mainly to meet the needs of traders in manufactured goods. They were typically designed as multi-storey buildings (for example in Lome, Abidjan, Cotonou, Douala and Yaounde) in response to space limitations especially in the capital cities.

The ground floor of the multi-storey markets was usually designed to accommodate traders in farm produce but was often allocated to traders in manufactured goods who altered the design of the stalls to meet their specific needs. With the exception of a few such as the Niamey and Ouagadougou markets, which have been reconstructed, most of these markets proved largely inefficient and the development of unregulated spontaneous markets on streets and sidewalks increased, particularly in the 1980s.

2.1.2. Number of traders in major markets

Table 1 below provides data on the number of traders in nine major central markets in Africa and Madagascar. The operating areas in these markets are defined as follows:

• Official market - consists of trading stalls within the official boundaries of the market as recognized by the market management or local authorities for purposes of collecting taxes and other fees;
• Real market - consists of traders in the official market and those in its immediate vicinity; and
• The extended trading centre - comprises all the points of sale in the real market and the surrounding streets.

Table 1
Number of traders in central markets in Africa and Madagascar

City	Bobo-D.	N’Djamena		Cotonou	Libre-ville	Antananarivo
Market	Central	Central	Grain	Dantokpa	Mont-Bouët	Anala	Andra	Anosi	Isotry
Official	4 837	2 663	4 293	15 342	4 251	4 356
Real	5 332	3 895	4 693	n.a.	5 982	5 467	2 564	1 495	1 294
Extended trading centre	7 234	8 588*		n.a.	6 682	9 179**	3 551**		2 296**

* Extended trading centre, comprising the Central market, the Grain market and mobile vendors.

** Zoma + fair day.

Table 2
Number of sales sites and population density of traders in central markets

Africa

City	Bobo-D.	N’Djamena		Cotonou			Libreville
Market	Central	Central	Grain	Dantokpa North	Dantokpa South	Dantokpa Total	Mont-Bouët
Total sites	4 837	2 663	4 293	13 299	2 043	15 342	4 251
Working sites	4 603	2 539	4 006	11 352	1 699	13 051	3 769
Main vendors	5 440	3 259	5 325	12 115	1 838	13 953	3 884
Asst vendors	919	329	744	4 166	680	4 846	n.a.
Total staff	6 359	3 588	6 069	16 281	2 518	18 799	3 884
Vendors/site	1.18	1.28	1.33	1.07	1.08	1.07	1.03
Asst vendors/site	0.20	0.13	0.19	0.37	0.40	0.37	n.a.
Total staff/site	1.38	1.41	1.52	1.44	1.48	1.44	n.a.

Madagascar

City	Antananarivo
Market	Analakely			Andravoahangy		Anosibe	Isotry
	Ordinary day		Fair	Ordinary day	Fair	Ordinary day	Ordinary day	Fair
	Official	Real
Total sites	3 456	5 467	9 179	2 564	3 551	1 495	1 294	2 296
Working sites	2 938	4 634	8 347	2 190	3 082	1 358	1 202	2 175
Main vendors	2 938	4 634	8 347	2 190	3 082	1 358	1 202	2 175

2.1.3. Condition of existing sales and storage facilities

Although there are a large number and variety of products traded, sales stalls in the main markets generally fall into four main categories, namely: securely locked up shops and stores, roofed stalls with open sides, simple tables and the bare floor, as shown in Table 3. The open stalls, which includes the last three categories, usually account for 60 to 80 percent of stalls in the markets. Traders using such facilities face acute security problems. Itinerant or mobile traders (hawkers) account for 33 to 50 percent of sales in the extended centre. The proliferation of these traders poses considerable problems in terms of market organization, maintenance and sanitation.

Until the 1970s traders were usually responsible for the construction of stalls and shops in central markets with only about 30 percent of the work involved being undertaken by market management or local authorities. The only exception is the Bobo-Dioulasso Central market where the local authorities were responsible for about 68 percent of the market construction. In recent years, local authorities have played an increasing role in the construction and reconstruction of markets, particularly in order to ensure that basic modern design requirements are satisfied. Traders, however, often pre-finance construction carried out by the local authorities.

Table 3
Classification of sales sites

City	Bobo	N’Djamena		Cotonou			Libre-ville	Antananarivo	Andra	Anosi	Isotry
Market	Central	Central	Grain	Dantokpa			Mont-Bouët	Anala
				Total	North	South
Total sites	4 837	2 663	4 293	15 342	13 299	2 043	4 251	3 456	2 564	1 495	1 294
Distribution (percentage)
Stalls/shops that can be closed up	53	39	29	16	16	13	20	25	33	15	15
Open-sided stalls	9	20	29	48	47	53	12	0	1	9	0
Tables	24	19	6	26	27	23	63	71	54	47	63
Layout on ground	14	22	36	10	10	11	5	4	12	29	22
Total	100	100	100	100	100	100	100	100	100	100	100

Table 4
Permanent and mobile stalls

City	Bobo	N’Djamena		Cotonou			Libre-ville	Antananarivo
Market	Central Market	Central Market	Grain Market	Dantokpa			Mont-Bouët	Anala	Andra	Anosi	Isotry
				Total	North	South
Total stalls	4 837	2 663	4 293	15 342	13 299	2 043	4 251	3 456	2 564	1 495	1 294
Distribution (percentage)
Permanent	64	64	58	67			50	31	43	31	20
Mobile	36	36	42	33	0		50	69	57	69	80
Total	100	100	100	100			100	100	100	100	100

Table 5
Covered and uncovered sites

City	Bobo	N’Djamena		Cotonou			Libre-ville	Antananarivo
Market	Central Market	Central Market	Grain Market	Dantokpa			Mont Bouët	Anala	Andra	Anosi	Isotry
				Total	North	South
Total sites	4 837	2 663	4 293	15 342	13 299	2 043	4 251	3 456	2 564	1 495	1 294
Distribution (percentage)
Permanent cover	69	76	64	70	71	66	51	42	49	40	33
Makeshift cover	9	8	13	9	8	12	30	39	n.a.	n.a.	n.a.
Uncovered	22	16	23	21	21	22	19	19
Total	100	100	100	100	100	100	100	100	100	100	100

Permanent cover: fixed and mobile stalls in market buildings, sheds or other structures.
Makeshift cover: stalls under umbrellas, tarpaulins, leaf shelters, etc.

2.2. Market management and types of occupancy by traders

2.2.1. Market management
2.2.2. Stall allocation
2.2.3. Malfunctioning markets

2.2.1. Market management

Market management and organization

Apart from a few special cases where construction or rehabilitation has been undertaken with external funding, most markets in Africa are controlled directly by local government authorities. The role of the local authorities includes allocation of stalls and shops, collection of taxes and fees, development and maintenance of facilities and market regulation.

Development and maintenance by local authorities tend to be hindered by a lack of technical and financial resources. Traders and their associations therefore assume this responsibility and quite often the result is that buildings become dilapidated and market facilities (especially sanitary facilities) become non-functional or extremely inadequate.

Contribution of markets to local finances

In many African cities the financial position of local administrations has been seriously deteriorating owing to the withdrawal of central government subsidies and declining revenues following the unification of tax accounting systems⁷. The problem has been further compounded by increased expenditure on services and facilities as a result of rapid urban population growth.

Markets constitute a major source of revenue for the local administrations (BREEF/CFD, 1994).⁸ Market revenues, however, often fall substantially below expectation, and rarely exceed 10 percent of the current revenue of city authorities in Africa. For example, market revenues account for only 5 percent of the total revenues of local authorities at Ouagadougou. This situation is largely attributable to the generally low fees charged as well as to the misappropriation of revenue by corrupt officials.

In many instances, revenue collectors lack basic qualifications (some are illiterate) and therefore cannot keep proper books of accounts. They also face considerable practical difficulties in revenue collection because of lack of market plans and reliable up-to-date lists of traders. Lack of incentives and ineffective monitoring systems contribute to the high level of corruption among revenue collectors. The situation is even more acute in the collection of taxes on behalf of the central revenue authorities.

In addition to the total or partial lack of an appropriate institutional, legal and accounting framework, municipal authorities often lack the political motivation to effectively pursue revenue collection. Even such practices as waiving fees for political purposes, especially during elections, contribute to low collection rates with regard to market revenues. The collection rates rarely exceed 30 percent of targets, thus marginalizing the impact of this source of revenue on the finances of local authorities as shown in Table 6.

Table 6
Budgets of local administrations in West and Central African countries
(1 000 million CFAF)

	Senegal	Cameroon	Côte d’Ivoire	Burkina Faso	Benin
Shared taxation	0.7	7.3	0	0.1	0
Operating allocation	0	0	3.5	0	0
Direct local taxation	7.0	5.2	12.3	1.2	1.1
Per capita tax	1.8	0.8
Land tax	1.8		3.5
House tax
Licences	3.3	3.0	6.5	1.0
Municipal taxes and income from municipal property	3.1	2.0	4.1	0.4	0.3
Including markets	1.9	0.4	2.1	0.1
Other (including balance carried forward)	0.2	10.0	1.7	0.5	0.05
Total	11.0	24.5	21.6	2.2	1.5

Source: BREEF, CFD, 1994.

2.2.2. Stall allocation

“It’s much easier to get the merchandise than to get access to a stall at a market.” This statement reflects the difficulties most traders have in obtaining access to facilities at central and other recognized markets in cities (whether in Dakar, Abidjan, Lome, Accra or the large Yoruba markets in Nigeria)⁹. Nonetheless, the large number of unauthorized traders operating in these markets, often under very uncertain conditions, is an indication that the authorities no longer have control over regulating access. In fact, political patronage and the considerable power and influence of certain traders often determine decisions on stall allocations.

Networks of traders often create informal access barriers to “foreign” (new) entrants (Cordonnier, 1987; Lewis, 1976). It has also been observed that frequent political changes tend to encourage lack of transparency in the allocation of stalls, as managers assume considerable discretionary powers and marginalize traders’ associations in the decision-making process¹⁰. This explains why the main complaint against the management of most urban markets regards the lack of openness and fairness in the allocation of stalls.

Subletting and key money

Subletting and payment of “key money” to stall owners are common practices in all the large markets studied. At the Mont-Bouët market, for instance, it is quite common to find nationals who had been allocated stalls subletting these to “foreign” traders. In almost all cases the rent charged for these sublets is considerably higher than the monthly rental fees paid to the market administration, although it varies depending on the type of stall, its location and the goods sold by the subtenant.

Transfer of stalls

Unofficial transfer of stalls, which is also a common practice, was particularly widespread in the late 1970s and early 1980s. It usually involves substantial payments; for example, at Bobo-Dioulasso during the 1980s payments made for transfers of stalls ranged from 150 000 to 300 000 CFAF for a shop of 9 m², and by 1994 this had risen to over one million CFAF). As the end of 1994 the transfer of a shop at the Thiaroye Station market in Dakar cost over one million CFAF.

Multiple holdings

A single trader often owns and operates a number of stalls, most of which are officially registered in the names of other people. Most of the traders involved in this practice deal in manufactured goods of high-value and staple foods.

“Frozen” stalls used for storage purposes

Most traders with multiple holdings usually use some of the stores as small-scale warehouses, since such facilities are either not provided or not sufficient in most markets.

Stall sharing

Stall sharing where several traders share the same stall or shop is also quite widespread in urban markets in Africa. This practice is a response to the difficulties most small-scale and micro-scale traders have in gaining access to stalls and the need to share market fees and other related expenses.

2.2.3. Malfunctioning markets

Unoccupied sections of markets

Despite the fact that most large urban markets are usually saturated or oversubscribed, there are often sections in such markets that are under-occupied for various reasons. In markets where unoccupied stalls are widely scattered, this may result from business failures owing to bankruptcy, serious illness or political persecution.

In theory the stalls vacated by traders with failed businesses must be reallocated but, in practice, there are difficulties in enforcing this measure partly because of the lack of clearly defined administrative rules and procedures. The reallocation process is further complicated by the fact that it is common for traders to pre-finance the construction of markets, and therefore reallocation decisions have to take account of the informal right of traders to transfer “ownership” of stalls to their heirs. This situation may be further complicated by significant differences in traditional succession systems and often leads to inconsistent interpretation of existing regulations.

In other cases, the occupancy rate in large sections of markets is very low, especially in newly developed or reconstructed markets. This situation is usually the result of various combinations of major organizational and economic problems that have a negative impact on the trading sector. For example, competition from unregulated traders (who usually evade taxes) can cause significant downward pressure on trade margins, while high subletting and unofficial transfer fees reduce the attractiveness of selling in recognized markets. Management problems also contribute to low levels of occupancy. Design deficiencies and the ineffective grouping of traders into sections according to the produce sold, tend to create access difficulties and discourage patronage of markets by both traders and consumers, as does arbitrary relocation of traders to sites that are unsuitable for their activities.

Market stall as homes

A large number of poor households, especially the families of watchmen, tend to use stalls and stores in markets as permanent “homes” when the markets close in the evenings. The modernization of market facilities is therefore seen as a threat to such families in terms of their needs for housing. However, because these poor households have no influence on decision-making, they generally lack the capacity to react against the implementation of modernization projects.

2.3. Traders and economic activity

2.3.1. Sectoral differences in turnover and trading margins
2.3.2. The behaviour of traders and trading strategies
2.3.3. Non-existent or insufficient facilities and the coping strategies of traders
2.3.4. Operating costs of traders

2.3.1. Sectoral differences in turnover and trading margins

The evidence from the markets studied clearly indicates the sectoral differences but also the remarkable intra-sector similarities in turnover and trading margins, as discussed below:

Retail trade

• Farm produce: In all the West African markets studied, the daily turnover of retail traders in farm produce ranges from CFAF 2 000 to 8 000 (although the average in Libreville ranges from CFAF 10 000 to 20 000). The turnover for the food trade in general, however, is two to three times higher than that for fresh farm produce. Trading margins are very low in the farm produce trade, particularly for small retailers who make up the majority of traders. Gross margins range from CFAF 500 to 1 000 and net profits from CFAF 500 to 700 per day.
• Manufactured goods: The daily turnover of retail traders in manufactured goods ranges from CFAF 10 000 to 30 000 in urban markets in West Africa. The wide variety of supply sources and the significant inflow of smuggled goods make it difficult to estimate trading margins for manufactured goods, but it is clear that gross margins are quite low, with net profits rarely exceeding 5 percent of turnover.

Artisanal trade and services

These activities usually generate the lowest turnover (CFAF 3 000-5 000) in all the West African markets studied. The only exception is catering in snacks and cooked food, which has a relatively higher turnover.

Wholesale trade

Sectoral differences in turnover and trading margins in the wholesale trade are very similar to those in the retail trade discussed above. For any given product the turnover of wholesalers is generally from eight to ten times higher than the turnover of retailers as shown in Table 7.

Table 7
Daily turnover in markets in Central and West Africa
(CFAF)

	Retail	Wholesale
Farm produce	2 000-8 000	20 000-80 000
Other foodstuffs	11 000-28 000	60 000-90 000
Manufactured goods	10 000-30 000	80 000-140 000

2.3.2. The behaviour of traders and trading strategies

Over the years the composition and operating behaviour of the market traders have undergone significant changes, the most striking of which is the growing number of hawkers and itinerant traders in most urban markets. Owners of stores and stalls are also becoming increasingly mobile, thus blurring distinctions between sedentary and itinerant, and regular and casual traders. Consequently, many regular (sedentary) traders who pay market fees and taxes complain about unfair competition from hawkers and unregulated itinerant traders. Their complaints, however, mask the fact that they often use the hawkers to sell their merchandise more quickly and sometimes move temporarily to other regional markets where they themselves operate as itinerant traders.

2.3.3. Non-existent or insufficient facilities and the coping strategies of traders

Lack of security for traders and their goods is a major problem in many markets, especially for wholesalers who handle large sums of money and many others whose trading activities begin at dawn and end late in the evening. Owners of shops and stalls therefore tend to employ guards or watchmen, sharing the cost among a group of traders. Wholesalers at some of the Antananarivo markets, for instance, usually hire porters as security personnel to guard their premises. Retailers of high-value merchandise in Conakry’s “Niger” market maintain a permanent militia to protect their customers. These private security arrangements are apparently insufficient, since many traders complain about the rising crime rate in the markets surveyed.

To cope with the problem of warehousing and storage for many traders, especially hawkers and other itinerant micro-retailers who do not own stores and stalls, many markets have informal systems under which temporary storage facilities are set up and maintained by groups of traders for overnight storage of goods. The rental fee for the use of these facilities covers, among other things, the cost of securing the premises (including wages for watchmen). It appears that the need for such facilities has not been realized in most markets in sub-Saharan Africa, with the notable exception of the Dantokpa market where management has built a certain number of privately run storerooms for this purpose. In some markets there are also specially designed freezer bins for meat and fish run by the butchers and fishmongers, largely because the few cold storage facilities provided at markets are usually either inefficient or non-functional.

Water supply to markets is often either insufficient or irregular. Traders who require water for cleaning their products and stalls have to rely on private itinerant distributors who supply water (sometimes of doubtful quality) at a very high cost. Cleaning and sanitation services provided by local and market management authorities are also usually insufficient. Traders either rely on family labour or hire porters to provide such services. Waste disposal is usually not a problem for those selling manufactured goods, but it is problematic for butchers, fishmongers and traders of fresh farm produce. These hygiene and sanitation problems are often compounded by lack of toilet facilities.

Catering services in most markets are provided by private operators and serve traders and their customers as well as a large number of low-income urban workers. Since in most cases markets were not originally designed to accommodate catering facilities, most operators provide these services from structures that often constitute fire and safety hazards.

2.3.4. Operating costs of traders

Table 8 summarizes the main operating costs of traders in a sample of markets in West Africa. It shows that the monthly rent (or sub-rent) is a key expenditure item for traders with stalls and stores. The amount of rent charged depends on the location of the store or stall and usually accounts for about 40 percent of trading expenses and 2 percent of turnover. Tenancy contracts with local or municipal authorities, in principle, provide information relevant not only to the collection of rent but also for determining the amount of fees and taxes to be paid by traders. The relevant database, however, is rarely updated and is thus not very useful for planning and monitoring purposes.

Table 8
Daily operating costs in some West African markets
(CFAF)

	BOBO		N’DJAMENA		COTONOU		LIBREVILLE
	Central Market		Central Market		Dantokpa		Mont-Bouët
	Produce	Manuf. goods	Produce	Manuf. goods	Produce	Manuf. goods	Produce	Manuf. goods
Expense items
Watchman	25	100	50	140	25	100	100	166
Water	25	25	25	25	25	25	100	100
Latrine	38	38			38	50	100	200
Cleaning	25			25	25		50
Site fees	25	67	25	120	25	93	500	1 000
Sundry
Sub-rent		200	50	250			666
Total expenses	138	430	150	560	138	268	1 516	1 466
Turnover	3 000	15 000	2 200	20 000	3 800	15 000	20 000	40 000
Gross margin	750	3 750	652	5 600	950	3 750	5 000	11 200
Expenses/Gross margin	18%	11%	23%	10%	15%	7%	30%	13%
Expenses/gross margin (excl.sub-rent)	18%	6%	15%	6%	15%	7%	17%	13%

The fees paid to the municipal authorities usually reflect the size (or scale) and particular activity in which individual traders are engaged, however, difficulties in enforcing the distinction between various traders create substantial scope for discretion by rate collectors, which in turn leads to fraudulent or abusive practices. For example, collectors may fraudulently fail to issue receipts to cover payments made by traders and misappropriate the mobilized funds. Generally, compliance with payment of fees and taxes is relatively higher among artisans and traders in manufactured goods (especially those who own stores and stalls) than among those selling farm produce.

2.4. The dynamics of spatial distribution of traders

2.4.1. Income disparity and spatial organization of markets

2.4.1. Income disparity and spatial organization of markets

In most markets in sub-Saharan Africa, the allocation of space is becoming increasingly inclined in favour of relatively wealthier traders in manufactured goods while the smaller-scale, low-income traders in farm produce occupy marginal areas, open spaces and streets. Traders in high-value products are usually located in “modern” well maintained sections of the markets which have relatively higher standards of sanitation and better access to parking, loading and storage facilities. The low-income traders in farm produce tend to be concentrated in sections of the market that are poorly maintained for a number of reasons including the desire of traders to minimize difficulties for the accessibility of customers, as land and planning constraints significantly affected the structure of urban marketing systems. It is evident, however, that power relations between the traders (varying in scale and products handled) and the influential political and bureaucratic classes also exert considerable influence on the dynamics of the spatial distribution of traders in urban markets.