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Writes Charles Dhewa
In addition to being seedbeds for individual entrepreneurial ambitions among women and youth, African mass/territorial markets have become good at shaping the social fabric and day-to-day life in ways trusted by the majority of citizens. They may not have advertising budgets and other resources that are in the hands of corporations, but being closer to everyday consumers are some of the advantages that enable mass markets to react swiftly to changing market dynamics.
Measurements and pricing preferences for diverse commodities are determined by buying patterns in mass/territorial markets. To the extent food supply is linked with money supply, understanding trends in mass markets can enable policymakers to understand money supply and demand within the economy. As major food aggregators and distributors mass markets are also aggregators of the value of commodities in the form of money presented in different currencies and modes of payment.
Mass markets as platforms for people to express their views
Another fundamental way mass markets shape the socioeconomic fabric is through being pathways for ordinary people to express their views about the economy and the role of financial systems in improving lives. If ordinary people do not have pathways for expressing their views to policymakers, they end up setting up their systems from which the formal system will be excluded. When given a voice through a platform such as the mass market, people can provide free constructive feedback to policymakers about what could be done differently to advance resilient food systems as opposed to promoting monoculture. It is through collaborating with farmers, traders, transporters, and other actors that policymakers can understand trading practices and entrepreneurship levels within mass markets. When policymakers master what happens in mass markets, they will realize that financial literacy should not be too academic. It is unfortunate that in many African countries, financial issues have remained too academic such that people who study finance in formal academic institutions are the only ones who understand issues like money supply. However, the majority of people understand how money functions in practice.
Through mass markets, African policymakers should be able to develop indigenous financial systems rather than always thinking that trading should happen through a medium of exchange in the form of a currency. As shown by what happens in mass markets and farming communities, the intrinsic value embedded in commodities is more important than a currency. That is why one can exchange a packet of sugar worth USD2 with a chicken worth USD5 and still be satisfied. A farmer can exchange a bull worth USD800 with a heifer worth USSD300 and be satisfied because s/he values what the heifer will produce in the short run. These indigenous notions of value are some of the ways mass markets define indigenous knowledge. Through mass markets, the financial sector can invest in understanding the seasonality of markets as key for ensuring loan performance because farmers get a Return on Investment (ROI) in the markets. Ultimately, financial institutions should be able to craft business models in smallholder communities that understand the marketing season.
More importantly, the bigger role of mass markets is adding value to commodities by providing a platform where diverse commodities get the best value. To a large extent, value and prices are set by the demand side when one area offers a high price. It is an embedded auction system within supply chains. This is how supply chain actors are finding each other without support from government ministries, NGOs and contractors. Without knowledge of how commodities are performing on the market and their contribution to employment creation, rural development, nutrition, food security, and coping mechanisms, it is difficult for communities to value their agriculture and food systems.
The power of data in capturing the value of mass markets
With the right data, financial institutions can build a market-informed financial system that is informed by seasons in terms of demand trends induced by several actors. However, capturing the value within mass markets requires a fine-grained view which can only be enabled through systematic data collection, processing, and sharing. That is also how a win-win socio-economic fabric can be built to improve productivity for both mass markets and large agricultural enterprises that are also part of the ecosystem. Where mass markets and large companies work together, some of the benefits include knowledge spillovers which enhance the right win-win socio-economic conditions. The fact that the Mbare market handles more than 50 commodities influences the size and dynamics of actors within the mass market including infrastructure and financial requirements. That means paying attention to mass markets, policymakers can enable mass markets to grow rapidly into large companies, adding to the vibrancy and dynamism of local economies.