Largely unremarked, despite its disruptive effect on traffic in places like Lagos, a lemming-like rush at retail sales outlets marked the end of last year. For those who got caught up in the tailbacks that built up around major shopping centres, there was time enough to ruminate on the reasons why so many of us were minded to bunch all our shopping into one frenzied session every year-end. One also wondered how much of this behaviour is a consequence of supply failures (and the inability of those responsible for such to properly husband these). There is rarely perverse behavior in an economy. The market (or whatever approximates to it) always responds to available incentives. Sometimes, responses may persist well after the incentives that called them out have ceased to hold sway. Or may kick-in long after all traces of the stimuli have vanished. But this does not alter the basic “call and response” nature of the market.
In the matter of the end-of-year buying frenzy, there is a strong case to be made for pot-holed roads, and bad road etiquette being complicit in the build-up of traffic that characterised most large retail locations. However, we also saw traffic suffocate at (predictable) nodes. More often than not, there were no notable attempts to manage these. Where traffic managers were present, their preferred responses were traditional: liveried wardens waving their hands to the frenetic pull and push of traffic.
Then, there is the small matter of the economy’s flexibility. Put differently, part of the difficulty with the crush from the shopping season is the absence of redundancies in our economy. In part, this failure shows up in the fact that shoppers in Lagos State, for example, traditionally head to the island in search of discount bargains. The strength of the custom at the super malls at Lekki and Ikeja only further buttress this point. In the face of demand that strong, the question is “why have we not had the market respond by situating outlets closer to needy communities?”
Often, in discussions about our diverse system failures, we tout the uniqueness of the domestic economy’s signaling mechanisms and the responses they elicit as the main problem. In truth, these are nearly always unlike anything recommended by the literature, or noticeable elsewhere. However, that is more likely because we regularly fail to factor into models of how our system (fails to) works the distortions hardwired into it. Corruption? Yes! But also snafus in the law enforcement infrastructure, play more than bit parts. These mean that retailers carry set-up and maintenance costs that often challenge successful business practices. The notorious infrastructure dearth adds significant costs too. Now, infrastructure is not NEPA/PHCN. The few big discount retailers operating in the country already generate their own power; and are cheaper than the traditional competitive offerings to boot.
Discussions on the infrastructure requirements of domestic retail trade in the country must include the ease and convenience of commuter access to retail locations: mass transit support for pedestrians; roads (and parking spaces) for car owners. Security, too. For parked vehicles, and pedestrian customers. Now, does the land tenure system play a role here? Arguably! Access to land that guarantees all of this services, facilities, and amenities, and the speed with which the necessary permits are processed might call for levels of investor connectedness that again only add new layers of cost.
Still, the shopping spree was not all negative. One has but a limited sense of the intensity with which it happened across the country; although it is safe to imagine that it took place only in urban locations. However, there is no way that level of consumer spending will not show up in output numbers. Still, because it was a seasonal thing, the numbers will of course have to be adjusted appropriately. The lessons are strong, nonetheless. First, we need to put a lot more money into the pockets of the middle class and cadres below them. We do well by these categories of economic actors to improve employment opportunities across the economy (but more especially in the private sector).
We are best able to boost employment opportunities by completely removing all obstacles to doing business in the country (including the anti-commerce charade at the sub-national levels that currently masquerades as “internal revenue generation”). Incidentally, with this latter, we are able too, to improve the economy’s supply responses. Businesses are positioned, with lesser distraints on their activities, to build the redundancies that help even out seasonal spikes and troughs.