Capital Ethiopia Newspaper


Old charm and organized chaos lost to big buildings and big business?

Enter Mercato, the largest open market in Ethiopia, where businesspeople, retailers worth millions and petty traders with just a few thousand birr are in a race to make it; to grow and succeed enough to own grand buildings, to run great companies, to employ hundreds. Tailors, shoemakers, street vendors have climbed up ladders of success in Mercato. Men like Yemiru Nega, the owner Dembel City Center; Diguma Hundae, owner of DH Geda; Getu Gelete owner of Getu Commercial Center are just some of the people who have started small in Mercato to rise to the top. For these Ethiopian businessmen and many more, Mercato is more than a place to trade goods; it is a place of opportunity for the poor and rich alike.

In recent years, however, Mercato’s façade has changed from one of grand Italian market halls standing alongside small tattered structures to one of ‘commercial centers’, new buildings a few stories high and indistinguishable from each other. These new buildings have risen from the ruins of the older shops, located across 42 terras, sections of the market dedicated to specific goods. The terras organize the vast market and their presence has been crucial to Mercato’s success, a part of the market’s character for decades. Notable are Military, Minyalesh, Saten, Somali,  and Bermel terras, all dedicated to attires, recycled and discarded items, boxes,  vehicle spare parts,  and barrels, respectively.
Today, only 20 terras remain, with the rest demolished to make way for the newer buildings whose small partitioned shops fetch rents from 10,000 to 40,000 birr, out of reach for most businessmen seeking to enter Mercato. In ‘Ke Entoto Hamus Gebya Eske Merkato’ a book by Berhanu Semu that translates to From Entoto’s Thursday Market to Mercato, the author argues that the famed Mercato has come to be dominated by big businesses as those starting with less capital and seeking to grow are squeezed out. Berhanu also points out that the old charm and organized chaos is giving way to a new system lacking coordination and a chaotic market place. With these developments, the author states, many tourists are disappointed to find that what they come to see is no longer there.
Though demolishing the old terras threatens the livelihoods of small business owners and petty traders, some like Serkalem Abiye, city Map Designer, appreciate the new and modern Mercato.
“For every change, there are some groups who do not benefit, but we have to see the big picture here. The number of businesses in Mercato is growing, so you cannot entertain everyone within this limited space. Constructing multiple storey buildings is the mandatory option. A simple observation can tell two reasons for the gradual shift of Mercato trade from open markets to shops within buildings. The first is the scarcity of space and the other is that people are more interested in doing business in well designed buildings which look good within the city as we as for the customers.”
Talking on a more pragmatic benefit of replacing open markets, Ateklti Gebregzhaber, Head of Addis Ababa Revenue and Customs Office, argues that the newer buildings generate more tax for the government’s coffers. Currently there are over 9,500 licensed businesses actively working in Mercato, thought to be only a fraction of the actual number of businesses operating within the market.
“Great amount of transactions are held in Mercato but we are not getting over one billion birr of tax revenue from there. The first thing is that there are many who do not have not clear addresses and are working informally. And, the other thing is that some of the places are difficult to collect the taxes from. We hope that the growing number of buildings will help us collect the proper amount of taxes from there.”
In 1993, a lease proclamation was ratified, allowing existing business to build within Mercato for 4,500 birr per square. But the amount was too high for the businesses of the time and in response, the Addis Ababa City Administration cut the floor price to 1,033 birr but also changed the proclamation to stipulate that land must be sold in an open auction and given to the highest bidder. Since this proclamation was put in place, those offering high prices for land have outbid small businesses.
Addis Ababa Trade Bureau is planning to build 16 commercial centers in the city over the next five-year period. And, Etabez Taye, Marketing Development Head of the Trade Bureau argues that the buildings promote entrepreneurs, rather than discourage them.
“Most of the buildings in Mercato are constructed by the people who were previously working over there. And it is false conclusion to say that small businesses are discouraged by the construction of better commercial centers. And we are constructing centers, which will be rented at cheap prices. We have big ambitions to make Mercato the business hub of Africa by allowing more people to do business there.”
However, men like Belay Chibsi fear that the new buildings close the market off to beginners seeking to grow to big companies.
“I cannot say that there is no value to the new buildings but we have to ask ourselves about how they affect new entrepreneurs with smaller capital. The prices kill entrepreneurial morale; the largest open market in Africa will become a place for those with big money,” he said.  If indeed the fate of Mercato is so grim, only time will tell.