EFFECT OF INFLATION ON STREET VENDORS IN WAAHEEN MARKET

HARGEISA CASE STUDY

BY: ABDILAHI HASSAN OSMAN

Research proposal submitted to the School of Graduate

Studies in Partial Fulfillment of the requirements for the Degree of Master of Business
Administration (MBA) of Lincoln University College

Supervisor: Peter Ssimbwa

September 2019

1
 DECLARATION

I hereby declare that this research paper is the result of my own work; I also declare that it
has not been submitted previously to any University or institution for the award of any
degree.

I further declare that the material obtained from other sources has been appropriately
acknowledged in the thesis.

Abdilahi Hassan Osman

Sign ________________________

Date ________________________

1
 APPROVAL SHEET

This thesis entitled “EFFECT OF INFLATION ON STREET VENDORS IN WAAHEEN

MARKET” submitted by Abdilahi Hassan Osman to Lincoln University College Malaysia in
partial fulfillment of the requirement for the award ofMastersDegree in Business
Administration (MBA) has been examined and is recommended for approval and acceptance.

PETER SSIMBWA

Research Advisor

2
 DEDICATION

I would like to dedicate this research to my dear mom Sophia Hassan Jama and my dear
Brothers and Sisters who helped me, and have been a great example to me of hard work,
discipline, and commitment.

3
 ACKNOWLEDGMENT

All praise is due to ALLAH the lord of the world. Without whose help and mercy we would
not have reached this far. My specially, many thanks also extended my precious mom, brother
and sisters, and my aunt who gives me a financial and moral support.

I would like to express my deep gratitude to my Advisor, Dr Peter Sswangua for his kind
cooperation, constant encouragement and valuable corrections and suggestions at the various
stages of this master thesis.

I have grateful thanks to my beloved friends, Abdirahman ismail Mohamed and Ahmed
Mohamed elmi who technically and morally supported me to finalize this research paper.

I gratefully acknowledge the street vendors in Waaheen Market for their kind response and
willingness for interviews, my deep appreciation and thanks also goes to the officials of
Hargeisa city municipality for their cooperation.

4
 LIST OF ACRONYMS

GDP Gross domestic product

GNP Gross national product

CPI Consumer price index

SVAC Street vending in African cities

NASVI National association of street vendors in India

SIHA Strategic initiative for women in the horn of Africa

ILO International labor organization

SPSS Statistical Package for Social Science

MFI Microfinance institutions

NGO Non Governmental organizations

SME Small medium enterprise

PPP Public-Private Partnership

5
 ABSTRACT

Street vendors are persons who offer goods or services for sale to the public without having a
permanently built structure but with a temporary static structure, they are not able to get
regular jobs, most of them are illiterate.

This study “Effect of inflation on street vendors in Waaheen market in Hargesia” was aimed
to analyze the inflation effects of street vendors in 80 street vendors were chosen from six sub
selected vendor groups, which are Money exchange vendors, Vegetable sellers, Milk sellers,
Meat sellers, Cosmetics, and Clothes and shoes sellers.Most of street vendors in Waaheen
market are from rural areas after repeated droughts; they are trying to solve their livelihood.

The data shows the livelihood impacts of widespread workplace insecurity, harassment and
elimination of merchandise on street vendors’ earnings and their assets. We briefly explore
the models of organizing and policy approaches in Waaheen street vendors.The research
explored that there is a minimal communication between Waaheen street vendors and
Hargeisa Municipality; also they don’t have strong union to deal their problems to the
Municipality.

The findings of the research indicated that Waaheen street vendors76.9% did not get any loan
from banks, MFI’s and elsewhere. 15.4% only able to go MFI’s. 70.8% started their business self
financing.

This study concludes the need for further research as a contribution to the Street vendors in
Hargesia city.

6
 TABLE OF CONTENTS
APPROVAL SHEET.........................................................................................II

DEDICATION................................................................................................III

ACKNOWLEDGMENT...................................................................................IV

LIST OF ACRONYMS.....................................................................................V

ABSTRACT...................................................................................................VI

TABLE OF CONTENTS.................................................................................VII

LIST OF FIGURES.........................................................................................X

CHAPTER ONE..............................................................................................1

INTRODUCTION............................................................................................1

1.0 Introduction...........................................................................................1

1.1. Background..........................................................................................1

1.1.1. Inflation as a global issue..................................................................1

1.1.2. Inflation in Africa...............................................................................2
1.1.3. Inflation in Somaliland.......................................................................2
1.1.4 Theoretical background of inflation....................................................3
1.1.5. Conceptual background of Inflation on markets................................4
1.2 Statement of the problem.....................................................................5

1.3. Objectives of the study........................................................................5

1.3.1 General Objectives.............................................................................5

1.3.2 Specific Objectives.............................................................................5
1.4. Research questions..............................................................................5

1.5. Scope of the study...............................................................................5

1.5.1 Time scope.........................................................................................6

1.5.2. Content scope:..................................................................................6
1.5.3. Geographical scope:..........................................................................6

7
1.6. Significance of the study......................................................................6

CHAPTER TWO.............................................................................................7

2.0 Overview...............................................................................................7

2.1 Theoretical prospective.........................................................................7

2.2. Definition of terms “Street vendor, Inflation, Market and Fiscal policy.8

2.2.1 Street Vendor......................................................................................8

2.2.1.2. Street vendors in Africa, their challenges and importance.............8
2.2.1.2.1. Street vendors in Africa...............................................................8
2.2.1.2.2. Challenges and importance of street vendors.............................9
2.2.1.2.3. Types of Street Vendors.............................................................10
2.2.1.2.4. Vendors and nature of street vending in Somaliland.................10
2.5. Vendors response to changing prizes.................................................12

2.2.2. Inflation...........................................................................................12
2.2.2.1. The demand side factors..............................................................12
2.2.2.2. Supply side inflation.....................................................................12
2.2.2.3. External factors............................................................................13
2.2.2.4. Monetary factors..........................................................................13
2.2.3. Waaheen Vendors response to changing the price..........................13
2.2.4 Fiscal policy......................................................................................15
2.6. Government policy to vendors...........................................................16

CHAPTER THREE........................................................................................17

3.0. Introduction........................................................................................17

3.1. Research area Description..................................................................17

3.2 Research Design..................................................................................17

3.2.1 Descriptive Correlation design.........................................................17

3.3 Study area...........................................................................................18

3.4. Sampling Design................................................................................18

8
3.4.1. Non probability sampling design.....................................................18
3.5. Study population................................................................................18

3.6. Data collection...................................................................................18

3.6.1. Sources of data...............................................................................18

3.7. Data analysis and interpretation........................................................19

3.8. Limitations of the study......................................................................19

3.8.1. Time and Source of information limitation......................................19

3.8.2. Respondents limitations..................................................................19
CHAPTER FOUR..........................................................................................20

4.0 Introduction.........................................................................................20

4.1 Background Information......................................................................20

4.2 Age of the Respondents......................................................................20

4.3. Gender respondent.............................................................................21

4.4. Marital status......................................................................................22

4.5. Educational level................................................................................22

4.6. Which type of your business is this?..................................................23

4.7. Where did you get your starting capital?...........................................24

4.8. Have you ever get investment or credit from?...................................24

4.9. Where do you save your profit?..........................................................25

4.10. What is the most vulnerable business that inflation can easily affect?
..................................................................................................................26

4.11. Have you got any free facility/service to Hargeisa Municipality?.....27

4.12 What caused by the missing of effective street vendors union?.......27

4.13. What are the biggest barriers that faced your business?.................28

9
4.14. What are the most repeated challenges faced by street vendors are?
..................................................................................................................29

4.15 What do you think is the causes of price rise of the commodity?.....29

CHAPTER FIVE...........................................................................................31

5.1. Conclusion..........................................................................................31

5.2. Recommendation...............................................................................32

REFERENCE...............................................................................................33

APENDIX 1 QUESIONNAIRE........................................................................34

10
 LIST OF FIGURES

FIGURE 1 AGE OF THE RESPONDENT..........................................................................................20

FIGURE 2 GENDER RESPONDENT................................................................................................21

FIGURE 3 MARITAL STATUS..........................................................................................................22

FIGURE 4 FIGURE 4 EDUCATION LEVEL..............................................................................................23

FIGURE 5 TYPE OF BUSINESS...............................................................................................................23

FIGURE 6 ORIGIN OF STARTING CAPITAL OF STREET VENDORS...........................................................24

FIGURE 7 INVESTMENTS OR CREDIT FROM MFIS. BANKS, WORLD BANK, NGO’S................................25

FIGURE 8 WHERE DO YOU SAVE YOUR PROFIT....................................................................................25

FIGURE 9 THE MOST VULNERABLE STREET VENDOR FOR INFLATION..................................................26

FIGURE 10 HAVE YOU GOT ANY FREE FACILITY/SERVICE TO HARGEISA MUNICIPALITY........................27

FIGURE 11 WHAT CAUSED BY THE MISSING OF EFFECTIVE STREET VENDORS UNION.........................27

FIGURE 12 BIGGEST BARRIERS FACED BY STREET VENDORS................................................................28

FIGURE 13 THE MOST REPEATED CHALLENGES FACED BY STREET VENDORS.......................................29

FIGURE 14 WHAT DO YOU THINK IS THE CAUSES OF PRICE RISE OF THE COMMODITY.......................30

11
 CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter consists of the background of the study, problem statement, the objective of the
study, limitation of the study, the significance of the study, and the research paper
organization. The paper would mainly address the relationship between inflation and market,
particularly the inflation effects of street vendors in waaheen market in Hargeisa Somaliland.
In Somaliland,we can define inflation as the rise in prices of commodities and devaluation of
Somaliland currency against the dollars that directly influenced the living conditions and
made many households face difficulty to get their basic necessary commodities.

1.1. Background

This paper would address the inflation effects of street vendors in Waaheen market
in Hargeisa but before that, we would try to address inflation, theoretical and conceptual
background of inflation, Informal sector in order to understand the term street vending, who
are street vendor, and what caused by street vendors. Theoretical discussion and the different
school of thoughts view on vending.This paper summarizes the findings from street vendors
to examine the response of the price changes and fluctuation of exchange especially
Somaliland shillings compared to Dollar.

1.1.1. Inflation as a global issue.

Inflation measures how much more expensive a set of goods and services has become over a
certain period, usually a year.Inflation has plunged countries into long periods of instability.
Central bankers often aspire to be known as “inflation hawks.” Politicians have won elections
with promises to combat inflation, only to lose power after failing to do so. Inflation was
even declared Public Enemy No. 1 in the United States—by President Gerald Ford in 1974.
What, then, is inflation, and why is it so important?Inflation is the rate of increase in prices
over a given period of time.
Inflation is typically a broad measure, such as the overall increase in prices or the increase in
the cost of living in a country. But it can also be more narrowly calculated for example, for
certain goods, such as food, or for services, such as school tuition. Whatever the context,

1
inflation represents how much more expensive the relevant set of goods and/or services has
become over a certain period, most commonly a year,Oner, (2017).
Inflation is defined as the erosion in purchasing power per unit of currency. In layman's
terms, this means that each dollar can buy fewer goods and services than it could before.

1.1.2. Inflation in Africa

According to (Franses 2013) report Three African countries have witnessed hyperinflation in
the period 1960-2015, and these are Angola, the Democratic Republic of Congo and
Zimbabwe. Other countries have moderately sized inflation levels,Bleaney and Francisco
(2016) document that “inflation is highly persistent and is higher in countries that are less
politically stable.LopesdeVeiga etal. (2016) report that “high levels of public debt are
coincident with reduced rates of economic growth and rising levels of inflation”. Higher
levels of public debt can be associated with inappropriate tax collection methods, which in
turn can be caused by corruption.Barugahara (2015).Reports say that political instability
associates with more inflation volatility. She uses the estimated conditional volatility from
a GARCH (1, 1) model. We tried to estimate this model for our annual data, but for many
countries, this estimation procedure failed. Hence, we will use simply the standard deviation.

1.1.3. Inflation in Somaliland

Hargeisa experienced inflation specifically for the last six years, excluding 2013, where both
the prices and exchange rate fluctuation rose for the last two years. For example February
ending year 2016 the prices of food rose 14.7 percent (Ministry of Planning, 2016). Further,
the exchange rate rose from 7700 to 9500 Somaliland shilling per 1 US Dollar from July
2016 to June 2017 (commerce of chamber, 2016, and 2017). Foreign currencies, particularly
US Dollars, are normally used in the country. People can use US dollars for every transaction
including the smallest transactions such as a bottle of water and this has implications for
inflation. (Ali 2017).
The rate of inflation is the percentage change in the overall level of prices varies greatly over
time and across countries, in the United States according to the consumer price index, price
rose at an average annual rate of 2.3 percent in the 1960s, 7.1 percent in the 1970s, and 5.6
percent in the 1980s, 2.4 percent from 2000 to 2014. (Mankiw 2016)Factors that contributed
to the existing food price inflation in Somaliland can be classified into two categories. The
first category is factors that have accelerated the sharp increase in food prices in the last five

2
months. These factors include the Dollar exchange rate which also increased considerably in
the last five months and has directly affected the price levels through imported goods that
domestic consumers pay. One significant example is the trade of Kat across the Ethiopian
border. The current livestock ban, prolonged droughts which have reduced local crop
production, and electronic money or mobile money have also accelerated the current food
price inflation.
The second category is factors that are causing long term existing and gradually increasing
food price inflation in Somaliland. These include a lack of an inflation policy, ineffective
government institutions, seasonality and low production of local crops, lack of trade
segmentation, population growth and rural to urban migration. The current food price
inflation has caused almost all prices of food items to increase, while prices of some items
have doubled. This means that household income cannot pay for the same amount of goods
and services as it could previously.
Present food inflation is adversely affecting the standard of living of many Somaliland
households, particularly the most vulnerable groups in society such as low Wage earners and
those on a fixed income. It has also led to worsening levels of poverty in the country.
(Inflation 2017)
Although inflation directly affects the street vendors, because they are vulnerable people,
illiterate and most of them are unskilled. They cannot able to deal with banks while they
don’t have collateral guarantees. Microfinance institutions are very rare as well as limited to
those who have access to collateral. They lack of training to develop their small businesses.
The Monthly Headline Inflation for March 2019 increased 0.3 percent compared 0.2 percent
recorded in February 2019. The Food Crop & Related items monthly Inflation increased by
0.4 percent in March 2019 minus 0.3 percent recorded in February 2019. In addition Core
monthly inflation that increases 0.4percent during March 2019 compared the 0.3percent
recorded in January 2019. “Consumer price index 2019”

1.1.4 Theoretical background of inflation.

Factors that contribute to the inflation of Somaliland are; the imports of goods from abroad
are very high according to the export and rises the prices of thecommodities which affect the
society, and lack of role of the ministry of commerce or lack of government intervention to
the market which is why the local merchants decide the determination of prices of the most
commodities. It has also led to worsening levels of poverty in the country.Various Scholars

3
have been referred to as the “Informal economy” it has been called the irregular
economy( Ferman and ferman, 1973), The subterranean economy ( "Gutmann 1977), The
underground economy (simon&witte, 1982), Houston, 1987) the black economy
(dilnot&morris, 1981), the shadow economy (Frey, weck& pommerehne,1982 cassel $ cichy,
1986), and the informal economy (mcCrohan& Smith,1986).The concept of “informal sector”
was originally created by the International Labor Organization (ILO) the study from Ghana
urban market (Hart, 1973). “Christine Klein, July 2014,
As the National Association of Street Vendors of India NASVI stated A Street vendor is
broadly defined as a person who offers goods for sale to the public at large without having a
permanent built-upstructure from which to sell.It is used to describe employment or
livelihood generation primarily within the developing world they sell a wide variety of goods
such as fish, fruits, vegetables, and clothes; they sell goods at lower prices than the
supermarkets making them an attractive shopping stop to people of low income.
A good proportion of women are found in street vending in most countries over the world. In
Africa, women constitute more than two-thirds of street traders in the main 1
International Labor Organization 4 cities of Benin, Cote D‟ Ivoire, Ghana, Mali and Togo
and more than half in Kenya, Madagascar, Senegal and South Africa (DIAL, 2011).(ILO)

1.1.5. Conceptual background of Inflation on markets

In Somaliland, Food inflation is very high, although the businessmen or enterprises usually
prefer to sell their products in Dollar rather than Somaliland shilling that is why the exchange
rate resulted in an increase of food prices that made the cost of buying in Somaliland shilling
very high. Inflation is just the rise in the price of commodities and devaluation of Somaliland
shilling compared to dollars. That directly impacted the purchasing power of many
households; it may harm the living conditions of low-income families which may result
difficult to get their necessity daily commodity. According to (Growth & Unemployment
2014) balance of payment, statistics say that the import is $ 883M while Aid + Remittance =
$500M, as a result, the export ($387M) plus $500M would balance the trade.
Livestock is the main economic sector which contributes 60% of GDP; other main sectors of
economic activity are remittances which seem to be decreased last years.According to the
above things, I believed that as a national it must emphasize the trade balance (import and
export) of the country, although the remittance from Diaspora decreased while cash from

4
 Ethiopian Qat (green grass) exchanged to dollar where as previously exported to Ethiopian
birr in Wajale border town.

1.2 Statement of the problem.

The Government of Somaliland failed to heal the inflation which hurts Somaliland shilling
and the increase of price of food and necessity items. Uncontrollable inflation may damage
the Socio-economic standard of poor households in Hargeisa as well as generally whole the
country.I would like to show how inflation is influenced by street vendors’ inWaaheen
Market.For these people, hawking/ street vending is one of the resources of earning a
livelihood, as it requires smaller financial input and the skills involved are very low and also
no entry level barriers in this job. But the role of the government to support is missing. There
has been no academic study issued about effects of inflation on street vendors in any City or
any market in Somaliland.

1.3. Objectives of the study

1.3.1 General Objectives.

To examine the influence of price changes of vendors and buyers behavior in Waaheenmarket
1.3.2 Specific Objectives.

i. To find out the effect of inflation on street vendors business in Waaheen market.
ii. To investigate the vendors response to price changes in Hargeisa city.
iii. To find out the relative effect of inflation on poor and rich buyer
1.4.Research questions

1- How are vendorsaffected by inflation in Hargeisa city?

2- What is the government doing to help vendors from challenges of inflation?
1.5. Scope of the study

The study was conducted in Waaheen Market in Hargeisa city which is the biggest and the
busiest market in Hargeisa city which have been functioning since 1960’s. Buyers from
different places meet with farmers; meet and vegetable cooperatives with fresh fruit and
vegetables, meat, milk, and packaged foods, local cloths and imported clothes, electronic
goods.

5
1.5.1 Time scope

The study have been done for a limited short period of time, week 1 and 2, I have done to
chapter 1 of introduction. Next three weeks I also have done to chapter 2 of literature review,
chapter 3 of research methods and methodology, questionnaire distribution and
collectionhave been done with In 3 weeks. Chapters 4 of Data analysis have done with in 1
week, while chapters 5 of conclusion and recommendation have been done within 2 days.

1.5.2. Content scope:

The study content includes strategies to reduce inflation on street vendors, Market response to
inflation, Buyers/Consumers behavior, monetary policy or Fiscal and mechanism to support
vendors.
1.5.3. Geographical scope:

This study is limited to street vendors in Waaheenmarket; it will mainly concentrate the cause
and effect of street vendors in Hargeisa. However it does not look over other markets in
Hargeisa rather it only use in Waaheen Market.The study is limited to street vendors in
Hargeisa city specially Waaheen market, causes, and effects of street vending in Waaheen
market.Most of them are vulnerable and unskilled women with an inadequate market space of
work, they pay daily tax collection by the local government of Hargeisa. This signifies the
role of women street vendors and how they contribute on the whole economy.

1.6. Significance of the study

The findings of the study have theoretical as well as practical significance. This study is
expected to give insights to understanding the importance of street vendors in Hargeisa city.
Most of street vendors are women, they support their households, paying food, rent,
education fee, and all expenses, in addition to that they contribute local government revenue
but the government has not supportive.
The study expected government and policy makers to reshape the strategy and policy to
establish clean and sufficient markets.Moreover it will be helpful to the concerned bodies
including Hargeisa Municipality to have some contribution to the formulation of appropriate
policies for preventing the problem of street vendors.It will helpful for academics as a
literature, furthermore the study expected Microfinance institutions to create easy access to
finance environment because street vendors have very limited access to loans from banks.

6
 CHAPTER TWO

LITERATURE REFIEW
2.0 Overview

In this chapter we will Review the related literature in Street Vendors in a previous academic
published papers, articles or books. Theoretical perspective and conceptual framework,
Vendors and nature of street vending in Somaliland, Street vendors in Africa and their
challenges and importance, Vendors response to changing prizes, government policy and
vendors, and finally inflation causes and effects in Somaliland.
2.1 Theoretical prospective

Early work in the informal sector tended to provide a dualist framework based on different
and sometimes contrasting definitions of “the informal” and “the formal”. Whether it was
self-employed vs. wage earner, unprotected vs. protected, poorly organized vs. well
organized.
During the 1980s these early dualist frameworks were made more complex through what
Rakowski (1994) identifies as four approaches grouped into the structuralize and the legalist
perspective. The first perspective emerged from some of the concerns of the International
Labor Organization and eventually incorporated neo-Marxist theories and dependency
theories. The informal sector was a product of the structural inequalities inherent in the
capitalist mode of production. From this perspective, informality acts as a survival strategy or
socioeconomic safety-net for those living in precarious conditions. Individuals who partake in
informal activities have no other option as they are squeezed out of the formal economy. As
Portes and Castells explain, the informal sector should be understood as a direct product of
the flexibilization of the labor force in order to achieve higher rates of competitiveness within
globalizing national economies. “Veronica Crossa”
For the second group, the legalists, the informal economy was a product of a complex and
bureaucratic legal system, which made it easier to live at the margins of a regulatory
framework than to be officially part of a political-economic system. Too much regulation was
considered the primary cause of informal activities. De Soto (1986),

7
2.2. Definition of terms“Street vendor, Inflation, Market and Fiscal policy

2.2.1 Street Vendor.

Street vendor is a person who offers goods or services for sale to the public without having a
permanently built structure but with a temporary static structure or mobile. Street vendors
provide valuable services to the urban population while trying to earn a livelihood and it is
the duty of the States to protect the right of this segment of population to earn their
livelihood. This policy aims to ensure that this important section of the urban population
finds recognition for its contribution to society, and is conceived of as a major initiative for
urban poverty alleviation. (Indian National Policy for Urban Street vendors).
Street vendors are the most visible informal market. Street vendors are the “one who bought
the Goods at wholesale and sell it in the street, roadsides, Bus stands and at the other places
of decent crowd for their daily livelihood. They have the option of selling the goods by
making a small shop at the convenient place or by carrying the goods to different places
without getting any license for the sale of goods”. “R. Karthikeyan&R. Mangaleswaran,
jan2017.
Doing a business in Hargeisa is a challenge with the financial institutions giving a very
limited financing loan to business startups. Street-vending as a key part of the economy has
given the women street vendors’ limited market space to conduct their business – in addition
to restricted provisions within the city plan. In each corner of Hargeisa, there are women
street vendors selling food stuffs, milk and second-hand clothes making them an integral
part of the informal sector and the country’s overall economic development. Day after day, a
great number of women are penetrating the informal sector as vendors of small businesses
due to the recurrent droughts and climate change in Somaliland. The unfortunate outcome of
these debilitating droughts, especially to the pastoral and agro- pastoral communities is dead
livestock. This has conversely increased the number of displaced communities – where most
of them are vulnerable, unskilled women.

2.2.1.2. Street vendors in Africa, their challenges and importance

2.2.1.2.1. Street vendors in Africa

There are slight regional and country variations in the goods and services provided by street
traders. However, based on research findings from the case studies certain generalizations are
applicable to street vending in Africa, Majority of street vendors are women, although there is

8
also a large number of men and children, Majority of street traders are own account workers,
with a majority engaged in retailing, while Most traders are married and support large
families with a high percentage of women being sole breadwinners. The rest of the traders are
single, widowed or divorced. Most female traders take care of their own domestic chores,
only a few are assisted by relatives. The same applies to working in the streets.
The male traders have domestic work done by their wives who are mostly housewives. At
work places in the streets, more men hire assistants or have helpers as compared to women.
Most street traders live close to their work place and walk to work. Few use taxis and buses
Most traders have primary and below levels of education. A few have secondary education
while very few have professional training. However, the younger traders tend to have higher
education than the older traders.
Male traders seem to have more professional training as compared to women traders also
Most street vendors undertake vending due to lack of other sources of income and
employment. Male traders invest in businesses that require high capital and also yield more
profits, while women make fewer profits because they are mostly engaged in activities that
require less capital Most street traders work between 8 – 12 hours a day, although the starting
and closing time vary depending on gender, type and location of business. Men tend to trade
for longer hours.(Mitullah 2003)

2.2.1.2.2.Challenges and importance of street vendors

The Street Vendors are the most internal working section of the human society. But they are
facing lot of problems. Following are the troubles. Harassment by Police and Local
government: Some of the police man is daily collecting the money from the Street Vendors
(Rs.10-20). They buy goods from them for free of cost. Every month, the police men file at
least 2 illegal cases against the street vendors. Police man used to scold the vendors by using
unparliamentarily words. Trading sites too small: The Street Vendors are Occupied the small
place and they are using some different equipment (transitory) for their business. Government
of Tamilnadu announces the tender notifications but they are not interested to participate in
the tenders. Problems with site allocation systems: Some vendors are occupying the area in
early morning and it leads to quarrel between the vendors. Sometimes these problems have
been taken to the court. Lack of facilities (e.g. shelters, storage): Hawkers are not having a
permanent place. They move from one place to anotherplace, so they are not using cold

9
storage of their goodsand some safety equipments (umbrella, water and etc)Lack of access to
credit: The vendors are not able toinvest lot of money (capital) for their business, because
they have no enough income. Lack of (business) skills and education: Every human being is
capable in doingwork with their skill.

2.2.1.2.3. Types of Street Vendors

A street vendor is broadly defined as a person who offers goods for sale to the public at large
without having a permanent built up structure from which to sell (NASVI, 2014).Type of
business vendors are categorized asPottery Vendors: who usually sell their commodities
sitting on the ground for an extended period.Larry Vendors:who basically mobile vendors
selling items like vegetables, fruits and so on. Mobile vendors: In terms of mobility vendors
can be classified as Mobile that moves from one place to another On the same day; Generally,
younger men and women are involved in this type; Mobile vendors deal with both semi and
non-perishable products; Vendors sell to other hawkers or small shops and consumers;
Mobile vendors are small-scale wholesalers. Street vendors in Myanmar can be classified to
organized street vendor and unorganized street vendor.

2.2.1.2.4. Vendors and nature of street vending in Somaliland

A number of factors are held responsible for the substantial increase in the number of street
vendors in India. Lack of employment and poverty in rural areas resulted people to move
from villages to cities. They move in search for new and better opportunities for existence.
These migrated masses with low education and lack of specific occupational skills fail to fit
in formal economy. Also the percentage of jobs in organized sector is shrinking. It does not
match the employment needs of the country. In Somaliland Street vendors in Waaheen market
in Hargeisa city can be classified in to three groups, according to their business activities.
Mobile street vendors: who caries their goods on hands, they sell light materials e.g. Men’s
waist belts, Watches, Sun glasses, cheap perfumes, Shaving machines and etc. they move
everywhere, also they visit Café shops and other public places to sell their products. Even
they cannot stop to go every corner of the city.
Mini vans or Bike Street vendors: (Kaaryoone/Miis) this is the most used for women to
carry vegetables fruits like banana, babaya and orange, etc. they trade near bus stations in
Waaheen market. Most of young males use bikes to carry female and children clothes and

10
shoes. According to the shortage of vending zones, they are also movable, but they are
limited to the main road from one place to another.
Fixed street vendors: who use the shades in front of enterprises; they may sell mostly
Clothes, shoes, food stuff and etc.
Only informal sector absorbs millions of these underprivileged. Some are also forced into
informal sector. Studies show that when people lost their jobs in formal sector due to
closures, downsizing and mergers, they had no other option than to engage in low-paid work
in informal sector for the sake of survival. “Street vending in India”Workers who were once
in formal sector are now forced into informal sector, which can be widely seen in countries
such as Philippines, South Korea, Thailand, Malaysia, Indonesia and India (SharitBhowmik,
2005).
According to Somaliland Day after day, a great number of women are penetrating the
informal sector as vendors of small businesses due to the recurrent droughts and climate
change in Somaliland. The unfortunate outcome of these debilitating droughts, especially to
the pastoral and agro- pastoral communities is dead livestock. This has conversely increased
the number of displaced communities – where most of them are vulnerable, unskilled
women. “Shadow economy “hargeisa women’s street vendor SIHA network, March 2018”
Street vending has a significant contribution in the urban and national economy of African
countries. In Kenya, street vending falls with the Small and Micro Enterprises (SME) which
provides employment and income to about 70 per cent of Kenya's population, especially in
urban areas. In the year 2002 alone, the SME sector employed about 5,086,400 people up
from 4,624,400 in 2001. This was an increase of 462,000 persons and consisted of 74.2 per
cent of total national employment. “Street vending in African cities 2003”
Street vendors are a major contributor to the local government’s revenue in Hargeisa city.
Women street vendors continue to play an important role in Somaliland’s economic
development thus contributing significantly revenue generation. A recent baseline survey
conducted in November 2017 by SIHA Network outlined that the local budget income per
year generated from the informal sector generated 40% to 65% of the total annual revenue,
through daily tax collection by the local government of Hargeisa. This represents the role of
women street vendors and how they contribute to the overall economy“SIHA network, March
2018”

11
2.5. Vendors response to changing prizes

2.2.2. Inflation

Inflation can be defined as an expansion in the quantity of money in circulation (Haberler,

1960) or defined as persistent decreases of the money value (Makinen, 2003). Consequently,
inflation lowers the purchasing power of the people as they need more money to purchase
one unit of good or service. Hence, people spend huge amount of money for consumption.
Saving and investment decline as result: resulting in higher unemployment and lower
economic growth. (Ruzima&Veerachamy 2015)
Consequently, inflation lowers the purchasing power of the people as they need more money
to purchase one unit of good or service. Hence, people spend huge amount of money for
consumption. Saving and investment decline as result: resulting in higher unemployment and
lower economic growth. Inflation makes investment doubtful for both domestic and foreign
investors. Also, it destroys the terms of trade in the country by increasing the price of
domestic goods more than the regional and the world market price.
It’s very difficult to accept or adapt Street vendors in Waaheen market the changing of the
price of commodities because they sell the cheapest commodities that are not possible to raise
the price.Inflation is originated from four major factors comprising of demand side factors,
monetaryfactors, supply side factors and external factors.

2.2.2.1. The demand side factors

As government increases spending for goods and services, price level also will rise. This
source of inflation is called demand pull inflation. Population size also has an influence on
inflation. If country has enormous populations, demand for goods and services increase
beyond production capacity of the country. As result, the inflation rate rises (Shammari and
Sabaey, 2012). But they proved that the number of populationdetermines inflation in
developed countries rather than in developing countries.

2.2.2.2. Supply side inflation

It occurs through the ineffective supply of certain commodities and an increase of the oil
price which raises the prices of certain food items (Ahmed et al, 2013). In an economy, oil
(petrol, gasoline and diesel) are used as input in the production process. Therefore, an
increase in oil price leads to a persistent rise in cost of production of goods and services. This

12
type of inflation is called cost push inflation (Shammari and Sabaey, 2012). The increase in
oil price for the land locked country as in the case of Rwanda leads to a huge increase in the
price of the particular items (including foods) due to the high cost of transport. This kind of
inflation is known as imported inflation. “Ruzima&Veerachamy 2015”

2.2.2.3.External factors

External factors such as exchange rates. Depreciation of domestic currency (Franc for
Rwanda) to main currency (US dollar), lead to increase in money spends for buying goods
and services from foreign market. Then, the inflation rate is accelerated. This particular sort
of inflation is known as import inflation (Ananias and Valence, 2012; Shammari and Sabaey,
2012).

2.2.2.4. Monetary factors

Monetary factors via money supply and interest rates. Though, the quantity theory of money
stressed the direct relationship between money supply and inflation. Increase in money
supply leads to high inflation in economy. On the other side, the interest rates have an inverse
relationship with inflation. Therefore, decline in interest rate lower the cost of borrowing.
Accordingly, the borrowing increases and high inflation will cause (Shammari and Sabaey,
2012)

2.2.3. Waaheen Vendors response to changing the price

Factors that contributed to the existing food price inflation in Somaliland can be classified
into two categories. The first category is factors that have accelerated the sharp increase in
food prices in the last five months. These factors include the Dollar exchange rate which also
increased considerably in the last five months and has directly affected the price levels
through imported goods that domestic consumers pay. One significant example is the trade of
Kat across the Ethiopian border. The current livestock ban, prolonged droughts which have
reduced local crop production, and electronic money or mobile money have also accelerated
the current food price inflation.
The second category is factors that are causing long term existing and gradually increasing
food price inflation in Somaliland. These include a lack of an inflation policy, ineffective
government institutions, seasonality and low production of local crops, lack of trade
segmentation, population growth and rural to urban migration. The current food price

13
inflation has caused almost all prices of food items to increase, while prices of some items
have doubled. This means that household income cannot pay for the same amount of goods
and services as it could previously.
The exchange rate of 1 Dollar to the Somaliland Shilling has risen from 7500 Shilling to 9800
Shilling within the last five months. Given that most locally consumed food items are
imported from abroad, the increase therefore begins with the Dollar exchange rate. The other
factor related to the increased Dollar exchange rate which has an impact on food prices is the
Dollarization economy (holding of foreign currency denominated assets by domestic
residents) in Somaliland. Domestic residents hold and widely use Dollars which dominate
assets and financial transactions in Somaliland market centers. Factors like the fluctuation of
the exchange rate of the Somaliland Shilling matter because imported items are generally
bought with US Dollars or other foreign currencies. (Khadar, 2017)
(Khadar Mohamed 2017)noted that the Research participants agreed that there is no inflation
policy in the country whether it is a monetary policy to control the amount of currency in the
market, a fiscal policy to direct governmental income and expenditure or any other policy to
manage factors causing food inflation. Hence this plays a role in the current food price
inflation in Somaliland.
The Annual Headline Inflation for the year ending of July 2019 increase 4.9 percent
compared to the 4.5 percent recorded July 2018. The Annual Food Crops Inflation increase
9.2 percent for the year ending July 2019 compared to 2.8 percent in July 2018. The drivers
of changes were apple increase to 7.3 percent for the year ending July 2019 compared to 1.2
percent registered similar month of the previous year. Carrot inflation registered an increase
9.0 percent for the year ending July 2019 compared to the 1.9 percent recorded to the
corresponding month of the previous year. Similarly, Garlic Toon inflation 19.0 percent for
the ending year ending July 2019 compared 8.3 percent to corresponding month of the
previous year. In addition, the Potatoes inflation increase 1.9 percent for the ending year
ending July 2019 compared to 0.3 percent corresponding month of the previous year.
“Consumer price index 2019”

Fosiya Mohamed Jama lives in Dami village in Hargeisa City with her eight (8) children.
She started vending in 2006, selling perfumes, head cover clothes and uunsibeside the main
road to the city centre in Waaheen Market in Hargeisa. Her daily income is SL 30,000 which
is equivalent to $3 US Dollars. Fosia supports her household through paying her children’s

14
school and university fees, food, rent, electricity among other responsibilities especially with
her husband being sick.

Fosiya pays SL 1000 in taxes per day despite the local government considering her work as
non-registered business trade. During the tenure of her work, she has suffered violations to
her rights, physical assaults and harassment by the police and government law enforcement.
SIHA network, (March 2018)

Centre for Civil Society conducted the report ofStreet Vendors at Patna (Bihar- 2010). This a
very few ofmarket space has been earmarked for them, Hence, theyare exposed to a number
of problems such as excessiveharassment by local police in general and traffic police
inparticular. Due to massive increase in the numbers ofstreet vendors and unplanned growth
of Patna, excessivecongestion and related problems have come up in thecity.

The result of the study revealed 96% of the femalevendors stated that lack of protection was
the mainproblem they faced in their work. It is common practicefor the police to charge Rs.
5-20 per day from eachvendor. The report can be used by the corporation forproviding better
urban infrastructure to the vendors andcity as a whole. Provisions of Public Convenience
andsanitation facilities can be developed on Public–PrivatePartnership (PPP) model and
Connection of tap can beprovided at suitable location along with some reservedarea used for
different vending purposes.

2.2.4 Fiscal policy

Fiscal policy is based on the theories of British economist John Maynard Keynes, which hold
that increasing or decreasing revenue (taxes) and expenditures (spending) levels
influence inflation, employment and the flow of money through the economic system. Fiscal
policy is often used in combination with monetary policy, which, in the United States, is set
by the Federal Reserve to influence the direction of the economy and meet economic goals.
Fiscal policy affects these measurements, with the goal to increase GDP and aggregate
demand in a sustainable manner.
Business tax policy – Taxes that businesses pay to the government affects profits and the
amount of investment. Lowering taxes increases aggregate demand and business investment
spending.Government spending – Aggregate demand is increased by the government's own

15
spending.Individual taxes – Taxes on individuals, such as income tax, affects their personal
income and how much they can spend, injecting more money back into the economy.
(KielyKuligowskiJune 14 2019)
Somaliland constitution mandates the executive branch of the government to prepare the
annual fiscal budget as well as the ensuing final accounts, while the House of Representatives
reviews, debates and has the power to make amendment before it is finally approved.

2.6. Government policy to vendors

According to Somaliland government there is no effective role towards the street vendors
whether Local government or Central government. Local government is responsible for
providing goods and services to its citizens at the local level, whether Healthy water, garbage
collection to improve sanitation and hygiene, free toilets to poor street vendors, and e.t.c.
Even they pay money to private companies in order to collect the garbage while there are
private companies that are responsible to collect city garbage.
All in allthere is no effective government policy towards the street vendors in hargeisa city as
a general specially Waaheen market.

16
 CHAPTER THREE

METHODOLOGY
3.0. Introduction

This chapter discusses the method that we used in this research, mainly general methodology
description and explanations concerned area of study. The chapter begins with research area
description, research design and focus on the study population, sampling, sources of data
collection and data analysis, validity and reliability of the study.

3.1. Research area Description

The study has been conducted in Hargeisa Somaliland, especiallyWaaheen market which is
the most populated markets in Hargeisa.Hargeisa is the main center for commerce, it is the
largest and capital city of Somaliland and estimates using a GIS survey in 2007 placed the
population somewhere between 350,000 and 850,000 people (Tempra, Jacobs, Demissie
2007). However, based on rural-urban migration and the city growth in general, officials
believe that the current population is actually now more than 1.5 million people. (Astrid R.N.
Haas December 2017).
We have no reliable records of street vendors in hargeisa as a general neither Waaheen nor
Gobanimo market, but street vendors are the major contributors to local government’s
revenue. Women street vendors continue to play an important role in Somaliland’s economic
development thus contributing significantly revenue generation. A recent baseline survey
conducted in November 2017 by SIHA Network outlined that the local budget income per
year generated from the informal sector generated 40% to 65% of the total annual revenue,
through daily tax collection by the local government of Hargeisa. This represents the role of
women street vendors and how they contribute to the overall economy. As a result the thesis
objectives concentrate effect of inflation on street vendors in Waaheen market in Hargeisa.

3.2 Research Design

3.2.1 Descriptive Correlation design

There are two variables which are theinflation and the street vendors so we apply descriptive
correlation design to investigate the relationship between inflation and street vendors in
Waaheen market of Hargeisa, Somaliland.

17
This type of research design gives an indication of how inflation can influence the low
earning street vendors.In order to get reliable date we used both qualitative research and
quantitative to make sure that the information for the study was trustworthy and reliable.

3.3 Study area

The study area defines the target segment of the research, it’s the area of interest that is to be
examined or sampled as a research purpose, Waaheen market is the area of study which is the
largest market in Hargesia or even in Somaliland as a general. Waaheen market combines five
sub markets they are: Vegetable market, Milk market, Meat market, Cosmetics market, and
clothes and shoes market.

3.4. Sampling Design

3.4.1. Non probability sampling design

Sampling design is just to collect the samples that can provide us an accurate representation
of the population. The study uses non probability sampling which we selected the sample size
from the population of Waaheen market. The sample size that research considers is more than
20,000 vendors in this market. There is no exactly record from local government.

3.5. Study population

The study population is the target population which can be groups or individuals, so our study
population is the whole population of Waaheen vendors, in Gacanlibah district in Hargeisa,
we used non probability sampling in order to select sample size or specific group segment.

3.6. Data collection

3.6.1. Sources of data

The data we collected is mostly primary data which is from the respondents, although it is the
result of questionnaire which we provided the target population.

18
3.7. Data analysis and interpretation

It’s the process of examining the data you have been collected using statistical and analytical
tools in order to get useful form of information. In this study we used to analyze the data by
using SPSS, EXCEL and STATA.
The SPSS and EXCEL are used to analyze data collection from surveys, tests, observations,
also it can complete a variety of data analyzes and presentation functions including statistical
analysesand also graphical presentation of data. This will be done by using the descriptive
data analysis and some of the information gathered in the questionnaire was also organized
and interpreted.

3.8. Limitations of the study.

There have been a lot of limitations during my research paper, e.g. Time limitation,
respondent’s limitation, and lack of enough information.

3.8.1. Time and Source of information limitation

There was a very limited time to finish and submit the paper. Although there was a very
limited source of information, because in this paper there have not been published as it is.
This study conducted in Waaheen Market in Hargeisa, the total respondents was 80 street
vendors but 65 respondents are valid while 15 respondents were invalid because 32% of
street vendors are non education. They are illiterate and ignorant people. The majority of
respondents were male aged 31-40 which was 38.5%.

3.8.2. Respondents limitations

One of The biggest problemsthat have met are most of the respondents are illiterate; they
cannot able to fill the form.During my questionnaire some of the respondents feared and say
“no response because you are from municipality and you want to increase the tax”
There was a non full response item of my questionnaire that makes some data invalid.

19
 CHAPTER FOUR

DATA ANALYSIS AND INTERPRETATION

4.0 Introduction

This study investigated effect of Inflation on street vendors in Waaheen Market in Hargeisa in
Somaliland. The study mainly focuses on mentoring, job rotation and orientation as they
relate the employee performance. Employee performance is defined in terms of input-output
relationship as the measure of the efficiency with which resources are utilized to create
outputs. Guided by human capital theory. The study was conducted through a cross sectional
survey. Data was collected from 80 local NGOs in Hargeisa. The response-return rate was
86%. Data was analyzed through regression analysis as reported here.

4.1 Background Information

This study shows the collected data on background factors of the respondents on Age,
Gender, and marital status and education level of street vendors. The results are summarized
in the following subsections.
4.2 Age of the Respondents

Respondents were also asked to indicate their age. The issue of age was necessary to measure
as street vendor’s age. The results obtained are shown in Figure 1.

45

40 38.5

35

30
26.2 25
25
21.5 Frequency
20 17 Percent
15 14 13.8

10 9

0
15-25 26-30 31-40 40+

Figure 1 Age of the respondent

20
Figure 4.1 shows the age of respondents, so 25% of the respondents which are the majority of
the respondents are the ages between 31- 40. While the second majority of respondents are
between the ages of 26-30 where as the ages of between 15-25 are the smallest respondents.

4.3. Gender respondent

Gender shows as number of female and male business vendors that responds of
questionnaire. Also it implies the majority of the street vendors.

Gender respondent

67.7
70

60

50 44

40 32.3 Frequency
Percent
30
21

20

10

0
Male Female

Figure 2 Gender respondent

Figure 2 shows the gender of respondents where as 44% of the respondents is male while
21% are female.The street vendors which vends the main street sides in Waaheen market are
mostly male because they can stay for a long period of time, also they can deal with police,
but female vendors are always inside the market except for some vegetable vendors like
Banana, Orange, Apple, Babaya and others which are 21% of our respondents,

21
4.4. Marital status

Marital status tells us how many respondents are male and how many are female
70
63.1
60

50
41
40
Frequency
30 27.7 Percent

20 18

9.2
10 6

0
Single Married Divorced

Figure 3 Marital status

Figure 3 shows the marital status of respondents. It implies the majority of vendors are
married 41 respondents which is 63.1 % are married while 18 persons which are 27.7% are
single where as 6 persons were divorced.

4.5. Educational level

Education level tells us the respondent’s education level which means how many street
vendors are University level, Secondary level, primary level and intermediate and none.

22
 Education Level

15.38%

None
32.31%
primary and Intermediate
Secondry
University/College
26.15%

26.15%

Figure 4 Education level

Figure 4 shows the level of education of street vendors or respondents in Waaheen market. 21
respondents which are the majority of them say no education at all, while Secondary and
primary/intermediate level are same which are 17 respondents per each respectively, where as
10 respondents are University level.

4.6.Which type of your business is this?

There are six types of business street vendors; they are money exchange, Vegetable seller,
Milk seller, Meat seller, Cosmetics shop, and clothes and shoes seller.

Type of Business

13.85%
Money Exchange
29.23% Vegetable Seller
Milk Selleer
Meat seller
24.62% Cosmatic Shop
Clothes and Shoes

13.85% 4.62%

13.85%

Figure 5 Type of business

23
Figure 5 tells us the majority of street vendors in Waaheen market are clothes and shoes
vendors. They always trade near main road sides; the second is Vegetable sellers which are
mostly female vendors, they are always around Bus stand area, they sell Most of them
Banana.

4.7. Where did you get your starting capital?

The starting capital of street vendors in Waaheen market can be self financing, Loan from
relatives, Loan from institutions, Family support and donation from NGOs

80
70.8
70
60
50 46
40
30
20 13.8 Frequency
12.3
8 9 Percent
10
1 1.5 1 1.5
0
ce ve
s s rt O'
s
an on po
n le ati ti p G
f
er stu su m
N
lf in ily
Se th m m fro
m ro Fa on
f ro sF ati
ns an n
a Lo Do
Lo

Figure 6 Origin of starting capital of street vendors

As figure 6 shows self finance is where the majority of respondents of street vendors started
their business, they earn their money and started their business with no financial aid, no loan
from MFIs. 46 respondents which are 70.8% were selected self finance. 9 respondents were
started their business family support finance, while 8 respondents started their business loan
from some of relatives.
4.8. Have you ever get investment or credit from?

Getting investment is very crucial for business in order to enlarge their businesses.

24
 90

80 76.9

70

60
50
50
Frequency
40 Percent
30

20 15.4
10
10
2 3.1 2 3.1 1 1.5
0
Microfnance Banks World Bank NGO's None

Figure 7 Investments or Credit from MFIs. Banks, World bank, NGO’s

As figure 7 implies, 76.9%of total respondents answered that they haven’t ever got any
investment or credit. While 15.4% say yes. Street vendors are suffering lack of investment,
the role of MFIs are missing.Alsoit’s very important to get investment in order to sustain their
business and compete.

4.9. Where do you save your profit?

Saving account is very important for business vendors.

where do you save your profit

Frequency Percent
41.5

33.8

27
22
16.9
11
7.7
5

Banks Rotating Saving Groups Tradition Home Saving eDahab and Zaad Accounts

Figure 8 where do you save your profit

25
Figure 8 shows the respondents savings, 41.5% of the majority of street vendors save their
profit to electronic mobile money from the largest two companies of Dahabshiil eDahaband
TelesomZaadservices. Rotating saving groups are 33.8% which is the second largest method
of saving of street vendors. While 16.9% go the banks to save their money.

4.10. What is the most vulnerable business that inflation can easily affect?

As we mentioned we selected six types of business which in Waaheen market, they are
Money exchange shops, Vegetable sellers, Milk sellers, Meat sellers, Clothes and shoes
sellers, and cosmetics.

45 40.0
40
35
30 26
25
20 18.5 18.5
12 12 13.8
15
9
10
4 6.2 2 3.1
5
0
ps rs rs rs rs cs
sho elle elle elle elle eti
e es ilk
s ts ss sm
ng bl ea oe Co
ha ge
ta M M sh
xc Ve d
eye s an
on he
M l ot
C

Frequency Percent

Figure 9 the most vulnerable street vendor for inflation

As the above figure 9 shows Vegetable sellers is the most influential street vendor for
inflation, 40% of vendors responded, According to the “Consumer price index 2019”
Somaliland Central Statistics Department,The Annual Headline Inflation for the year ending
of July 2019 increase 4.9 percent compared to the 4.5 percent recorded July 2018. The
Annual Food Crops Inflation increased 9.2 percent for the year ending July 2019 compared to
2.8 percent in July 2018. Majority of vegetable comes from Ethiopia and Southern Somalia;
also sometimes they cannot acquire continuously because it’s a seasonal like watermelon

26
4.11.Have you got any free facility/service to Hargeisa Municipality?

Frequency Percent

73.8

48

21.5
14
3 4.6

Shelter Space to trade None

Figure 10 Have you got any free facility/service to Hargeisa Municipality?

As figure 10 shows 73.8% of respondents answered no free facility or service from

Hargeisa local government at all, whether shelter space to trade or any other service even
garbage disposal system they pay money. 21.5% got free space to trade while 4.6% of
respondents got shelter.

4.12 What caused by the missing of effective street vendors union?

40.00% Lack of unifcation of vendors

Lack of Municipality role
50.77% Inability to get credit
Difficulty to get trade licence
Lack of government role
3.08%
3.08% 3.08%

Figure 10 what caused by the missing of effective street vendors union

27
As shown in figure 11, 51% of respondents say lack of unification among street vendors are
the main cause of absent of street vendors union, because majority of street vendors did not
got education, they are mostly illiterate people so they do not have personal or business
mission vision and objectives so it’s very difficult to unite unless the government intervention
and organizing as 40% of respondents say.

4.13. What are the biggest barriers that faced your business?

There are a lot of businesses barriers that faced the vendors, some of them are Very high tax
rate, Lack of access to credit, Unsupportive local authority, Inability to get license,
Harassment by the municipality police, and lack of place to trade.

12.31%
21.54%

Very high tax rate

Lack of access to credit
16.92% Unsupportive local author-
ity
Inability to get licence
1.54% Harassment by the Munic-
ipality police
Lack of place to trade
13.85% 33.85%

Figure 11 biggest barriers faced by street vendors

As figure 12 shown lack of access to credit finance is the biggest barrier to street vendors
34% says that, where as 22% say very high tax rate is the main problem, 17% of respondents
are suffering harassment from the municipality police, 14% unsupportive local authority is
the biggest barrier as a street vendor, and 12% say lack of place to trade is the biggest barrier.

28
4.14.What are the most repeated challenges faced by street vendors are?

Frequency Percent
41.5
36.9
24 27
12.3
5 7.7 8
1 1.5

Figure 12 the most repeated challenges faced by street vendors

As figure 13 shows that 41.5% of respondents answered the fear of the local municipality is
the most repeated challenges, they emphasized their argument that Hargeisa municipality
occasionally starts a campaign to cleaning the main roads near Waaheen, and destroys their
temporary buildings and shades. 36.9% of respondents selected inadequate shade and
sanitation while 12.3% say heavy competition between vendors are the most repeated
challenges faced by street vendors.
4.15 What do you think is the causes of price rise of the commodity?

38.5
29.2
25
19
15.4 13.8
10 9
2 3.1

k l
ate er
ce an
ly Al
ger m la B upp
n r s
ha om nt an
ex
c
ofc Ce r th
of be
r e
n high
atio am
is
u ch d
ct of an
fu ck m
La De

29
Figure 13 what do you think is the causes of price rise of the commodity

As figure 14 shows 38.5% which are the majority say fluctuation of exchange rate is the
cause of price rise of the commodity, although 29.2% of respondents answered all factors are
the causes of price rise of the commodity.

30
 CHAPTER FIVE

CONCLUTION AND RECOMMENDATION

5.1. Conclusion

In my field work research I found out that Inflation had an extreme effect on street vendors,
this study shows that street vending is an important as a source of income and employment
furthermore vending provides an opportunity that minimizes the impact of higher
unemployment in Somaliland but there is also minimal communication between Waaheen
street vendors and Hargeisa Municipality, in addition to that they recognized as an illegal
business, this is because the vendors associations are weak and require facilitation in
organizing and advocacy. 51% of respondents say lack of unification among street vendors
are the main cause of absent of street vendors union.32% of respondents which are the
majority of street vendors have no education with Lack of organizing and training.
The street vending activity helps in generating income with minimum investment of capital
and without requiring large human capital. Street vendor is a person offering goods for sale to
the public without having a built-up structure from which to sell.They sell cheap varieties of
goods including Clothes and shoes, and also rapid increase in street vending in Hargeisa is
due to the unemployed and landless rural people migrating to urban areas.
There is a high need for street vendors Union that can contact to Municipality; Street vendors
in Waaheen are not assisted by financial institutions as they are unable to produce any
guarantee and security. Although Microfinance institutions are very inadequate in
Somaliland.Majority of them (70.8%) generally use their own savings, (13.8%)are from
family support while, (12.3%) are loan from relatives as their capital investment. Although
majority of street vendors have their savings account with Zaad and eDahab electronic money
of their mobile phones as the result of study shows which 41.5% is.Meat sellers charged the
meat high prices in morning and reduced prices in the evening.
The majority of street vendors in Waaheen market are wheel barrow vendors that sell Clothes
and shoes, 19 respondents which are 29% of the total respondents, Vegetable vendors’
respondents are 16 which are 25% of the total, and they are the most vulnerable vendors.
Meat sellers and Cosmetics sellers and Money exchange sellers are same number of
respondents which are 9 per each and 14% percent of the total, the least street vendors are
Milk sellers which are very rare, and they are 3 respondents which is 4% of the total.

31
5.2. Recommendation

 The local government should provide street vendors free education for their children,
Housing and business subsidy in order to survive the inflation and increasing price of
living standard.
 Hargeisa municipality must establish special office to look after the welfare of the
workers in the unorganized sector under which the street vending falls.
 Establishment of women street vendors association would be helpful to develop their
capacities.
 There should be a proper documentation of Waaheen street vendors in order to eliminate
their unstructured manner and to assist them and follow them regularly.
 The Government through its proper ministry should conduct skill training programs to
them to enrich their capacities.
 The Government can provide relief funds or subsidy to street vendors at the time of high
inflation or disasters and natural calamities.
 The local authority should include them to placement at the time of making town and city
master plan.
 To promote organizations of Street vendors e.g. Unions / Co-operatives/ Associationsand
other forms of organization to facilitate their empowerment.
 To take measures for promoting a better future for child vendors by making appropriate
Intervention for their rehabilitation and schooling.

32
 Reference

Oner, C (2017), Inflation: Prices on the Rise,

IMF,http://www.imf.org/external/pubs/ft/fandd/basics/inflat.htm C. Oner is Economist in the
IMF’s Asia and Pacific Department.

Franses, Philip Hans. 2013. “Inflation in Africa.” (October 2017): 1960–2015.

Ali, Safia Ahmed. 2017. “Inflation Effects on Hargeisa ’ s Low Income F Amilies.” (June).

Franses, Philip Hans. 2013. “Inflation in Africa.” (October 2017): 1960–2015.

Inflation, Food. 2017. “Food Inflation in Hargiesa : Causes and Consequences Mentee :
Khadar Mohamed Gahayr.” (July).

Mitullah, Winnie V. 2003. “Street Vending in African Cities: A Synthesis of Empirical

Findings from Kenya, Cote D’Ivoire, Ghana, Zimbabwe, Uganda and South Africa.” :
1–20.

Christine Klein, July 07, 2014, History of the Informal Economy

(Ministry of trade and investment, 2012-2013, An Investment guide to Somaliland

opportunities and conditions, www.Somalilandinvest.net)

Veronica crossa, an Academic article

http://www.wiego.org/sites/default/files/publications/files/Day%202.3%20-%20Street
%20Vending%20-%20Crossa.pdf

Christine Klein, July 07, 2014, History of the Informal Economy

SIHA network, March 2018, Shadow economy, hargeisa women’s street vendor

(SharitBhowmik, 2005). Street vending in india.

(KielyKuligowskiJune 14 2019) business news daily https://www.businessnewsdaily.com/3484-

fiscal-policy.html

“Consumer price index 2019” Somaliland Central Statistics Department of the Ministry of
Planning &National Development (MoPND),http://www.somalilandcsd.org/consumer-price-
index-march-2019/

“Consumer price index 2019” Somaliland Central Statistics Department of the Ministry of
Planning &National Development (MoPND), http://www.somalilandcsd.org/consumer-price-
index-july-2019/

33
 APENDIX 1 QUESIONNAIRE

QUESTIONNAIRE ABOUT STREET VENDORS

Topic Research: Inflation effects of Street vendors in waaheen market
Dear: Acceptance
Many thanks to you for the time to fill in this questionnaire and your honest opinions
will be very helpful in our omission to prove our research topic.
GENERAL INFORMATION
(Please circle the appropriate answer that best represents your opinion)
Age
1.15-25
2. 26-30
3. 31-40
4. Above 40
Gender
1. Male
2. Female
Marital status
1. Single
2. Married
3. Widowed
Educational level
1 Universities/College
2. Secondary
3 Primary and intermediate
4. None
Q1. Which type of your business is?
1. Money exchange (shilling, dollar and some other limited currencies)
2. Vegetable seller
3. Milk seller
4. Meat seller
5. Cosmetics shop
6. Clothes and shoes sellers

34
Q2. Where do you get your starting capital?
1. Self-Finance
2. Loans from the relatives
3. Loans from institutions (Microfinance)
4. family support
5. donation from any institution or NGOs
Q3. Have you ever got any investment or credit from?
1. Microfinance institution
2. Banks
3. World bank
4. Government
5. Ingo, LNGOs
6. No
Q4. Where do you save your profits?
1. Banks
2. Rotating saving groups (Hagbad)
3. Traditional home saving
4. Zaad and edahab (Electronic money)
Q5. Can you purchase your product on credit by time for repayment?
1. during that day
2. One week
3. 2 weeks
4. One month
5. None (for cash)
Q6. Do you get profitable prices while selling the product?
1. Yes
2. No
Q7. How the price of purchase is determined?
1. Supplier is determined
2. it depends on the market condition
3. It is a familiar sale
4. After Bargaining the price is determined

35
Q8. Do you have any institutional customers?
1. Schools
2. Hotels, Restaurants,
3. Firms/ Companies
4. None
Q9. The most vulnerable business that inflation can easily affect is?
1. Money exchange shops
2. Vegetable sellers
3. Milk sellers
4. Meat sellers
5. Clothes and shoes sellers
6. Cosmetics and shopping
Q10. What are the difficulties while purchasing?
1. Price is very high
2. Irregular availability of supply of products
3. Transportation problem
4. Your supplier don’t know that you are a customer
Q11. What are the difficulties while selling?
1. Price determination
2. High Bargaining
3. Lack of Stores
4. Quality
Q12. How do you face competitors in business?
1. To keep good quality of goods
2. To reduce price
3. Both of them
4. None
Q13. Do you have any regular customers?
1. Yes
2. No
Q14. Do you get any free facility/service to Hargeisa Municipality?
1. Shelter
2. Space to trade
3. Water/sanitation hygiene/toilets
36
4. Garbage collection
5. Electricity service
6. None of them
Q15. The missing of effective street vendors Union is caused by?
1. Lack of unification of the vendors
2. The role of Municipality is missing
3. Inability to get credit
4. Difficult of get trade license
5. Lack of government organizing role
Q16. What are the biggest barriers that faced your business?
1. Very high tax rate
2. Lack of access to credit
3. Unsupportive local authority
4. Inability to get license
5. Harassment by the police and local government
6. Lack of place to trade
Q17. The most repeated challenges faced by street vendors are?
1. Inadequate shade, Sanitation, drinking water &; electricity
2. Wastage of unsold goods
3. Feeling insecure, Irregular Employment
4. Fear of local government and central government
5. Heavy Competition between vendors
Q18.what do you think is the causes of price rise of the commodity?
1. Instability and fluctuation of Exchange rate
2. Lack of chamber of commerce and ministry of trade role
3. Role of the central bank is missing
4. Demand of the commodity is much higher than the supply
5. all of the above

37
38