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Innovation within the informal sector

Exploring the innovation shown in various industries within the informal sector, we can draw inspiration from the business concept of street hawking, or, as I like to call it, “Traffic Marketing”. Most people who have lived or been to West Africa are aware of the term “go-slow” or traffic congestion. In Nigeria, for instance, it’s not uncommon to be stuck in traffic for one-three hours before you reach your destination. If you are lucky enough to afford a car with air conditioning, then you can enjoy the traffic and radio. However, for those who don’t own a car with air conditioning, driving in the hot sun can be a gruelling experience.

Hawkers in Lagos, Nigerian Monitor

Photo credit: Nigerian Monitor, 2017

These street hawkers (entrepreneurs) have identified a need and have created a solution. From the image above, you can see a man selling drinks in one of Lagos’ gridlocked streets. He is able to create a business out of this, as chilled drinks are in high demand during traffic jams in the summer.

What is interesting about this business model is that the cost of entering the market is minimal, as there are neither rental costs involved nor regulation. From an economist’s point of view, people flood the industry, as there are no barriers to entry. This creates diversity in the market: as the above picture demonstrates, there are entrepreneurs selling a range of products. It is almost a physical form of our modern-day eBay, where people display their goods for service for people to buy. It is quite fascinating that you can buy food, clothes and even stationery from the comfort of your car. Dayo Olopade says it best in his book Bright Continent, “A road trip offers a glimpse into the dynamism of African commercial life”.

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