Addis Ababa CID Citichat 21 June 2001

CITICHAT 24/2001 - 22 June 2001


Addis Ababa BID (CID)

There is a lot happening in Johannesburg worth noting but it'll keep for next week as I must share with you the biggest surprise of my Addis Ababa trip.

A working, thriving and successful Business Improvement District (BID) already operates in that city, in fact in the market area, Merkato, that I mentioned last week! Sure, the people involved have never heard of BIDs. Yes, and there is no 'city legislation' governing its structures and processes - but it is as good an Improvement District as I have seen anywhere in the world and a lot better than some. Turns out its existence wasn't only a surprise to me but also to the local professionals I was working with! (For the uninitiated, a BID is a geographic area in which the majority of property owners agree to fund services which are supplementary to those provided by various levels of government in order to protect and improve their asset base or investment - through legislation the minority, who may not be in favour of the BID, are also required to pay the predetermined levy.)

The "Improvement District" operates in an area of Merkato called Ehil Berenda literally translated as the "Grain Verandah"- the focus of the area obviously being the grain industry. Grain is delivered from all over Ethiopia to this area from where it is redistributed. There are five main activities in the area which have each formed themselves into 'trading associations'. These represent grain merchants, retail sellers, vegetable sellers, Gesho sellers (Gesho is a commodity for local beer brewing) and the community itself. There are about 3 000 'informal traders' in the "BID" area and

5 000 donkeys are used for local transportation

The driving force and visionary behind the "BID" is Getachew Habtie, who is a mechanical engineer and who manages the project part time as he has his own business in addition. A Board of 30 drawn from all the associations oversees the project and an annual assembly (AGM) is held to review progress, finances, etc. The "BID" operates both a savings and a current bank account and its financial affairs are audited.

Income is derived through an agreed payment of 30 cents per 50kg sack of grain (ie the "levy").This "levy" is charged on all transactions (ie each truck pays the levy when deliveries are made and each merchant pays the levy when the grain is sold).

The money is collected by three groups of agents who work competitively as they are paid a commission for collection (3.5% which works out to approximately 800 Birr per person, 1 Birr is approximately equivalent to a 1 Rand.) Overall BID income is approximately 100 000 Birr per month.

The "BID" employs a civil engineer and 120 workers of which 41 are security guards and the balance are supervisors, cleaners and persons employed on road construction

The "BID" pays above average wages to its staff (minimum wage of 10 Birr per day) and believes this philosophy helps to deter corruption. I mentioned last week that Ethiopia is a very poor country and this is borne out by their wages and salaries. Thus a security officer who might earn between R2 500 and R3 500 in South Africa earns 400 Birr per month which is in excess of the average in Merkato which is between 200 and 250! Cleaners earn 250 whilst professional technicians and supervisors earn between 800 and 900 Birr per month.

But it is what they have achieved that is truly remarkable. The internal roads within such areas are generally unpaved and with the current weather conditions (they have rain from June to September) the roads are slush. There is also no lighting provided to such internal roads. The "BID" has thus financed and provided to date 31 340 square metres of asphalt road surfacing. This has entailed building a stone sub-base off the existing surface with layers of various thicknesses of fines and an asphalt finish - the "BID" does not contract any of this, it does everything itself, almost totally by hand, other than for the aspects that can't be done without plant and equipment which the "BID" has in fact bought and operates itself. I saw a group of about forty people, men and women, sorting out and packing rocks to form the stone sub-base - people who would probably never have the opportunity to have work in this city of high unemployment. In addition they have to date constructed 3 400 metres of drainage,

258.7 cubic metres of retaining walls and provided 240 street lights (connected to Council supply, the "BID" pays for consumption). In a desolate roadscape that rings the area they are 'greening' the traffic islands (the "BID" pays for water consumed).

They have negotiated with the Council to take over a public toilet in the area that was not being maintained due to lack of Council funds. They are rebuilding the toilet and will charge users 25 cents per use which is considered fair in relation to the policy of a 10 Birr per day minimum wage. However, for the very poor in the area who could not even afford 25 cents, a separate toilet facility is provided free. Groups of street cleaners keep the area clean although work is still being done to develop a refuse collection system

The practical difficulties of co-ordinating dozens of trucks delivering and redistributing grain in between 5 000 donkeys used to distribute sacks of grain locally has been formalised and is controlled by the "BID" using specific times for vehicular and donkey collections and deliveries. Also formalised are the informal persons who earn an income carrying 50 kg sacks of grain on their necks and shoulders - each 'carrier' is registered with the "BID" and provided with an identity card. If grain is stolen within the area, the person/organisation who suffered the loss can claim from the "BID" which pays them out and takes up the identification of the suspect. Security has been improved through the employment of security guards, with the security service operating on a 24 hour basis. This provides confidence to those who trade within the area as vehicles often have to be left overnight and were previously being broken into or stolen before the service was started.

The "BID" is now investigating the collection of the donkey droppings with a view to making briquettes which will be supplied freely to the very poor people in the area as an energy source.

There is no legislation to enforce compliance or payments of the levy. This is a group of people who have recognised the limitations of local government and instead of whingeing or 'packing for Perth' have simply got on with the job at hand. And, as they come to the end of construction in their own area they are now looking at how they could possible help their neighbours. Maybe the real difference between so-called First- and Third- world countries is that in the former the 'haves' never stop expecting more yet find a dozen reasons why things cannot be done whilst, in the latter, the 'have-nots' know that if they don't provide for themselves, no-one else is going to and so they get on and do it.. And crowning the attitude of 'let's find a way and just do it' is that the poor and destitute of Ehil Berenda are part of the plan and therefore part of the city.