Kariakoo Market in Dar es Salaam is for locals, it is not the place for tourist trinkets. Since 1974, it has been a hub for local informal trade and with East and Central Africa. With daily business transactions of about $10 million and over 55,000 visitors daily Kariakoo is the centre of all kinds of businesses: estate development, banking, consultancy and shopping malls, buzzing with deals from street traders to business tycoons. The market also attracts customers from as far as Uganda, Rwanda and Democratic Republic of Congo, Zambia and Zimbabwe among other countries.

Kariakoo Market in Dar es Salaam

Kariakoo is not untypical of informal markets and bazaars all over the world. Amidst all the talk of modern retailing, there is a real need to understand better the way these markets work; the role they play in local communities and how they can become a catalyst for inclusive and sustainable growth.

There is a large selection of inexpensive housewares, equipment and tools. According to the Tanzania Bankers’ Association (TBA) Chairman, Mr Laurence Mafuru, the country’s economy remains mainly informal, with only 25 per cent of the total money in the economy transacted in the formal financial system.

As indicated, K is not just about local trade and neither is it made up solely of llocal traders. Chinese investors dominate the water supply, infrastructure and agriculture sector in Tanzania.A paper prepared by the Centre for Chinese Studies of the University of Stellenbosch in South Africa in 2009 says that more than 90 per cent of the construction companies in the country are Chinese. However, in terms of the machinga vendors at K, Chinese influence doesn’t stop at big projects; rogue Chinese traders are threatening their livelihood with many traditional products and tourist goods. “It is hard for us to sell something because our customers could go to a Chinese shop and get it cheaper,” says Levy, a clothes’ vendor in Dar es Salaam. “We need these people to invest in energy, IT and health. Not in groundnut vending,” said Shainul Bhanji of Global Investors Consultation Centre, a foreign investment organisation. “Chinese are major importers or wholesalers. They should leave retail to local people,” she explained.

We need to guard against xenophobia here because there is a far more significant poin to be made. A key part of the Chinese success is not so much in their access to cheap products but in access to finance from within the Chinese community to make things happen. This contrasts with the position that local informal traders are in. They have no legal title to their homes and, have no bank accounts. This means that 75 per cent of money in the market circulates in the informal system.

Let’s look at this more closely. The combined customers of all 45 banks in the country are less than one-third of all subscribers of mobile phone companies: Vodacom, Zantel, Airtel and Tigo. All of these players are now offering financial services. This is a wake-up call for the banking system all over the Majority world. Why should anyone wait for the baning system to open up a branch in the village when you can do everything you need with money on a mobile phone? And it is places like Kariakoo Market that may force the issue.