The paper discusses the importance, potential and limitations of wholesale markets in the supply and distribution of food in African cities. A brief overview of food marketing systems shows that most major African cities lack specialized and efficient wholesale markets, even though their function is a critical factor in the effectiveness of any food marketing system. In general urban food markets in Africa are characterized by inadequate marketing infrastructure leading to congestion and the overflow of traders onto streets and pavements, inefficient storage, handling and packaging of produce resulting in excessive waste (through spoilage), poor produce quality and rather high distribution costs. Another common problem in African food marketing systems is information asymmetry between traders and producers, which weakens the bargaining position of the producers and exposes them to considerable price uncertainty. The underdevelopment of the wholesale sector is in part a consequence of these problems and also accentuates inefficiency in food marketing.
The benefits of efficient wholesale markets include enhancing transparent prices, facilitating transactions in the marketing chain, reducing marketing costs through economies of scale by lowering per unit transport and handling costs. The volume of produce handled by each trader tends to increase, thus reducing the number of times operators in the marketing chain have to restock in a given period. Wholesale markets also promote sorting and grading as well as standard weights and measures, thus facilitating trading by description which minimizes transaction costs. By encouraging efficient off-farm storage, wholesale markets contribute significantly to reduction in post-harvest losses.
The main criticisms raised against the development of wholesale markets include rising transport costs for retailers, increased unemployment resulting from labour-saving efficiency gains in food distribution, and under-utilization of costly market infrastructure. These criticisms are examined in the paper, showing that they are not always justified and that steps can be taken to resolve or circumvent them.
In promoting or modernizing wholesale markets in African cities, the focus should not only be on the technical design of physical infrastructure but also on the specific conditions required in order to distribute particular produce as well as on the location of the markets. Also critical are the skills and knowledge of market operators, particularly women food traders, and the effectiveness of organizational arrangements pertaining to the management of market facilities. Furthermore, it is apparent that any sustainable attempt to promote efficient wholesale markets as part of an overall improvement in FSDSs should involve concerted and coordinated effort by all key stakeholders. The role of stakeholders, especially government and municipal authorities, in this process should therefore be clearly defined.
