In tandem with the intensification of China's engagement in Africa over the course of the past decade, academic (and media) attention has quickened (among many others Brautigam Reference Bräutigam2003; Alden Reference Alden2007; Broadman Reference Broadman2007; Taylor Reference Taylor2009; van Dijk Reference van Dijk2009; Cheru and Obi Reference Cheru and Obi2010). However, this highly diverse subject field has been scrutinized mainly in terms of partnerships in developmental aid projects, cultural exchange (Taylor Reference Taylor2006; Tull Reference Tull2006; Kitissou Reference Kitissou2007; Davies Reference Davies2008) and macro-economic and geo-political issues related to large-scale Chinese projects in the natural resource or infrastructure sectors. This ‘enter the giant’ perspective has prevailed despite the fact that, as Mohan and Tan-Mullins (Reference Mohan and Tan-Mullins2009: 588) put it, ‘for most Africans the Chinese presence is marked by traders in the markets’. Yet, while a few scholars have studied the export on a temporary basis of Chinese labour to Africa (Gong Reference Gong2007; Lee Reference Lee2009; Ma-Mung Reference Ma-Mung2009), the activities of self-organized migrant entrepreneurs from the People's Republic who are not associated with big Chinese players have received much less attention. This is true despite their sheer numbers, cumulative investment volumes and their potentially stronger impact on local societies – due to their proximity and daily interaction with local counterparts, customers, employees and other social actors. Among those authors who do deal with this subject, many emphasize their competition with and domination over local businesses (Brautigam Reference Bräutigam, Large, Alden and Soares de Oliveira2008; Dobler Reference Dobler2008; Kernen and Vulliet Reference Kernen and Vulliet2008). Only one study that we know of has noted the positive impact of Chinese engagement on informal traders' access to the market (Lyons and Brown Reference Lyons and Brown2010). However, the analysis is made at the level of import statistics and thus does not contribute to our further understanding of the societal impact flowing from direct interactions between Chinese migrant entrepreneurs and local populations. To date, only Niikondo and Coetzee (Reference Niikondo and Coetzee2009) have investigated these ‘on the ground’ interactions between Chinese traders and their African employees. However, they reduce and restrict the conflictive dynamics of the employment relationship to the employees' perspectives and to general stereotypes, and thus do not adequately recognize the complex interactions between the two groups – which potentially might determine the mutually beneficial adaptation of socio-economic practices.
In contrast, our research has revealed that the interactions between individual Chinese agents and their local counterparts in Ghana and Senegal affect in fundamental ways the social fabric of urban economic life in both countries. During our two consecutive field trips in Spring 2011 and Winter 2011/2012 (with a third visit, in the case of Senegal, in Summer 2012) – based on qualitative interviews with 98 Ghanaian, 85 Senegalese and 195 Chinese informants in both countries and participant observation in local and Chinese businesses – our multilingual, three-person research teamFootnote 1 found a clear dichotomy. While established local merchants in Accra and Dakar express their discontent at the growing Chinese presence, aspiring African traders applaud the newly opened pathways to gainful economic activity. We hypothesize that these predominantly small-scale vendors – creatively appropriating the new situation for their own ends – have found in the Chinese presence a means by which to bypass the restricted economic, social and religious networks that hitherto have excluded them from access to selling space, start-up capital and affordable goods. We further assume that the emerging dynamic of petty traders – who are claiming increasingly large market shares due to the recent democratization of access to cheap Chinese consumer goods – has triggered a gradual process of normative change within the two countries' local economic orders. In this article, by analysing three distinct new pathways into the market, we present arguments for our hypothesis that the mere presence of Chinese entrepreneurs has sparked observable processes of dis- and re-ordering in the social relationships and normative frames that structure market entry in Senegal and Ghana.
We begin by introducing the central urban markets of Accra and Dakar, and explain how their market orders normatively prescribe distinct forms of succession and access to crucial capital on the basis of networks. We then illustrate the restrictive nature of these orders, by portraying the experiences of aspiring traders who have attempted to enter into market trade – despite their lack of relevant network membership – but who have failed to receive full recognition in their business activities from normatively established actors. Moving on, we next analyse the observable changes triggered by the relatively recent influx of Chinese actors into the market. Building on this, we then demonstrate how the growing Chinese presence might create new opportunities for groups and actors who have previously been excluded from the market. Scrutinizing the impact of these developments, we draw to a close by arguing that this reshuffling of actors, institutions and practices has, on the one hand, given rise to perceptions of disorder for some, but, on the other, also fostered the creative adaptation of limiting norms for others.
Our country case studies of Ghana and Senegal share few similarities with regard to historical experiences,Footnote 2 political trajectories, policy formulation, composition of populations, dominant religions and foreign relations. However, what both countries have in common is, on the one hand, economies that harbour a high incidence of informality. Informal entrepreneurs dominate the markets in Ghana and Senegal, especially in the realms of distribution. Formal trade organizations currently claim no more than 10 per cent of the market share in foodstuffs (Chamlee-Wright Reference Chamlee-Wright1997) and manufactured goods similarly reach the consumer through largely informal business channels. Yet, despite the high incidence of so-called informal economic activities, market orders cannot be described as being irregular or disorderly. Informal market networks actually steer a wide range of social and economic transactions. These networks, especially when it comes to market access, also integrate aspiring merchants through complex webs of relations, following specific social codes and norms – even though formal regulation may be largely absent. In addressing informality, Meagher (Reference Meagher2010: 16) argues that ‘the key issue is not the boundary between the official and unofficial spheres, but the distinctive organizational dynamics and power relations that characterize non-formal forms of order’. Thus, despite their differences in detail, market interactions in Ghana and Senegal follow very similar economic logics and analogous social constellations – especially in terms of the orders that regulate a newcomer's access to such capital needs as selling space, market information, networks of suppliers and customers and, not least, financial stock and assets.
On the other hand, Ghana and Senegal have also both recently experienced an intensified influx of Chinese entrepreneurs seeking – independently of the big, state-financed infrastructural projects – business opportunities in trade, among other sectors. Our research has revealed that these independent Chinese migrants have settled in Ghana and Senegal so as to invest in various different business activities – among others, pharmaceutical and medical services, petty manufacturing, hotels and restaurants and, most prominently, in the trade in cheap consumer goods. While the Chinese in Senegal are free and able to obtain licences to trade, Chinese businesspeople in Ghana are bound by the country's Investment Act. This limits the undertaking of certain economic activities – such as the ‘sale of anything whatsoever in a market, petty trading, hawking or selling from a kiosk at any place’ (Government of Ghana 1994) – and thus they confine themselves to the wholesale trade in commodities. In Ghana, Chinese traders from Zhejiang Province dominate the scene. They engage in wholesale activities on various scales, and usually specialize in one product category – for which they maintain close, kinship-based network connections with producers in their home regions. In Senegal, traders from Henan Province who had not necessarily been practising this profession before are the dominant group. Their kinship-based enterprises, which are less closely tied to producers than those in Ghana, sell a wider range of – mostly fashion-related – commodities, and also operate on a much smaller scale than enterprises in Accra.Footnote 3
The recent phenomenon of Chinese economic migration to Africa has had a number of historical predecessors. Both the Arab conquest and European colonialism represented a penetration and permeation of local economies by foreigners, who thereby contested prevailing economic structures. Under colonial rule, other non-African groups – such as the Lebanese – also came to dominate specific economic niches in many major cities across the continent (Garlick Reference Garlick1960; Looß Reference Looß1999; Peleikis Reference Peleikis, Knörr and Meyer2000; Thioub Reference Thioub, Maitte, Martini and Terrier2009). The presence of and economic activity first by Lebanese, then by Indians, and more recently by migrants from within the region itself, has provoked strong reactions among local populations and entrepreneurs. Beuving (Reference Beuving2006) shows how, for the case of Lebanese migration into Benin, foreign businesses interact with local counterparts to provide new opportunities – but how the former also rather exclusively remain within their own networks of procurement for credit, market information and economic space. Although the behaviour of Chinese businesses in Ghana and Senegal is characterized by very different economic and social practices, we were nevertheless able to observe very similar tendencies. We did not find any empirical evidence that individual Chinese economic sojourners – whose business models tend to be highly speculative – engage in any form of meaningful economic and social interaction with the local population beyond primarily functional and opportunistic buyer–seller and/or employer–employee relationships. Yet we were nonetheless able to establish that – despite this apparently shallow interaction between the two groups, which is hindered mainly by linguistic and cultural barriers and misunderstandings (Giese and Thiel Reference Giese and Thiel2012) – the mere presence of Chinese actors has a decisive impact on local orders.
THE NORMS AND ORDERS OF MARKET ENTRY
The term ‘market’ is a fundamentally ambiguous one. In the words of Bestor (Reference Bestor and Smelser2001), it signifies, often simultaneously, the webs of relationships, institutions and distinct geographical spaces that enable economic transactions. Market entry, then, can be defined only loosely as the establishment and mobilization of particular relationships that – embedded in the socio-economic spaces and networks of the market – grant newcomers access to the capital and resources necessary for independent economic activity.
In many West African economies, business and trading networks based on ethnic, religious and/or socio-professional identities have long been a commonplace phenomenon (Lovejoy Reference Lovejoy1980; Dike and Ekejiuba Reference Dike and Ekejiuba1990; Harneit-Sievers Reference Harneit-Sievers2010). These networks do not merely serve rational business interests, but also morally embed individual merchants. When network ties are mobilized in order to acquire large amounts of capital for investment in profit-bearing activities and, ultimately, personal status, they are often classified as ‘bigman entrepreneurial systems’ (Stewart Reference Stewart1990). Within this type of system, networks have to be carefully nurtured in order to enable their mobilization for access to capital. This occurs on the basis of serious commitments, in the form of adherence to codes of sociability (Ibid.: 149). Social control further ensures – through sanctions imposed within the network – adherence to cultural norms (Ibid.: 146). Hence, once resources have been acquired through these networks, they cannot be deployed freely but have to remain circulating within particular webs of social relationships. In other words, although every entrepreneur relies on ‘weak ties’ for the exploration of new profitable terrains – in addition to ‘strong ties’ activated for mobilizing resources (Granovetter Reference Granovetter1983) – the movement of capital within networks is always ultimately more or less exclusive.
The exclusiveness of these networks, then, is central to the reproduction of the normative systems of the market, as it serves to uphold particular subject positions in relation to other networked actors, institutions and practices. Normatively, the status and social acceptance of established merchants is critically dependent on their fulfilment of the intrinsic obligation to redistribute wealth. Thus economic success obliges Senegalese merchants to return part of their profits to the Muslim brotherhoods for reinvestment in socially meaningful projects. Similarly, in Ghana there is a social obligation to share with ‘those who were less fortunate to escape poverty’ (Merchant No. 2, Ghana 2011 interview), which means mainly with members of their extended family or co-villagers – but also with needy elders in the marketplace. However, it is mainly close relatives and acquaintances within what Meagher (Reference Meagher2006) refers to as ‘networks of accumulation’ who benefit from this social norm of redistribution, as opposed to those embedded in ‘networks of survival’. Networks of accumulation are characterized by their closure to outsiders, maintained through group boundaries resultant from participation in particular social or religious institutions. ‘Those excluded from these networks of advantage [are] confined to narrower, more poorly resourced personal networks … made up largely of kinship, hometown, friendship, and church ties with those equally disadvantaged’ (Ibid.: 571). Amin (Reference Amin1969: 180ff) established that Senegalese businesses cease to exist upon the disappearance of their owner. However, a specific form of transmission of capital persists both in Ghana and Senegal that is not geared vertically towards heirs, but which diagonally favours subsequent generations in the established merchant's lifetime and which – rooted in the compensation of time and labour invested by a young niece or nephew (kin or classificatory) of the businessmen and women (Marfaing and Sow Reference Marfaing and Sow1999: 201) – ensures reproduction. The lion's share of established entrepreneurs' social obligations thus favours their own network of accumulation.
Market orders in both Ghana and Senegal are rooted in a norm of ‘give and take’ that, according to Guyer (Reference Guyer2004), is particular to West African economic value systems. Instead of a system of pure self-interested accumulation (‘piling up the same upon the same’), West African economic actors instead follow a logic of ‘composition’ – characterized by ‘the capacity of merchants to combine different value registers’ (Guyer Reference Guyer1993, Reference Guyer2004). One of these non-monetary registers, termed by Guyer as ‘wealth in people’, illustrates how taking responsibility for others – that is, training them in the trade profession and providing initial capital and guidance, among other socially enforced obligations – is also a means of self-realization as a respectable and recognized person within established market networks. Networks of accumulation thus do not merely reproduce themselves and their underlying normative principles through internally enforced gatekeeping mechanisms, but simultaneously produce status and recognition for merchants within them.
In line with these theoretical perspectives, the introduction of a new merchant into the urban markets of Ghana and Senegal follows specific rules – tacit knowledge about which is generalized and widespread throughout both societies. Up-and-coming merchants are integrated into the market through relations of patronage, usually involving a close relative. In the rare case where the apprenticeship-type relation is extended to a close acquaintance of the family, they are usually addressed as classificatory mothers or fathers – thus underscoring the elements of trust, respect and seniority in the relationship (Merchant No. 18, Ghana 2011 interview). Within the apprenticeship, the transmission of knowledge – as well as the conditions for obtaining independence upon its completion – are subject to moral contractsFootnote 4 between the parties involved, and also to social control within the (kinship) network. As a general pattern, the apprentices spend, at an early age, a lot of time in the market with their patron. Youths thus get to know the environment and the basic principles of price making, bargaining and marketing (Clark Reference Clark1994), assimilate the marketing skills, and internalize the normative principles and ethics that later set them apart from untrained traders. With time, and often following a strict learning periodization, the young aspirant is given ever-increasing responsibility and is eventually asked to sell small amounts of wares in the market's alleys and sidewalks. Youths generally take the commodities given to them and, selling them at a higher price than was agreed with the patron, create a first surplus for themselves. This form of commodity loan eventually becomes the financial basis for the branching out from the patron's trade into an independent business endeavour. In Senegal, where apprenticeship follows more predefined stages than it does in Ghana, a protégé commences with ambulant selling for about twelve months before he or she then gets to be employed in the storage of goods for another year. Some are subsequently sent abroad for an interim period of up to eighteen months in order to ‘study life’ and so as finally to be ready to settle down with their own business, ideally after buying their own boutique (fond de commerce) (Trader No. 82, Senegal 2011 interview). Either way, through spending enough time with a patron, the apprentice accumulates both financial and social capital that is released upon the termination of the apprenticeship. This allows the protégé to subsequently create an independent business after leaving the apprenticeship and to obtain the blessing of the patron, in the case of Ghana, or of their religious leader, the marabout, in the case of Senegal.
Since the 1980s, the mode of knowledge transfer prevalent in Ghana and Senegal has also taken more formal shapes – such as studying in European or American business schools. In Senegal, the parents – often themselves illiterate – of this new group of merchants initially regretted that their offspring had returned with commercial skills and marketing knowledge that, in their view, were incommensurable to Senegalese commercial culture and values (Marfaing and Sow Reference Marfaing and Sow1999: 170; Boesen and Marfaing Reference Boesen and Marfaing2007). From the 1990s onward, the visa obligations introduced for Europe, together with the devaluation of the CFA Franc in 1994, created a veritable enthusiasm among parents for the business schools in Morocco – where education was not only less expensive than in Europe but also recognized both the values of Islam and of a society similar to their own.
Now, the children of the big merchants go to school but the connection with the region remains strong, their ways of living in the foreign countries stay Senegalese. When the youth are in a foreign country, they come back during holidays and work in the shop of their father, and the father makes use of all possibilities to come and visit the sons abroad. Today, the inheritance from father to son depends on his education (Merchant No. 21, Senegal 2011 interview).
Since the 1980s, too, the first business schools have been established in Ghana and Senegal. The major female merchants of Ghana, in particular, encouraged their daughters to increase their economic independence through education (Merchant No. 52, Ghana 2011 interview). In general, however, knowledge transfer in both Ghana and Senegal continued as ‘learning by doing’, under the close supervision of a more experienced relative. The current, educated generation of merchants often started working at a very young age in one of their parents' shops, so as to learn the real trade and in order to assimilate the business ethics and strategies as a ‘way of life’ (Gueye Reference Gueye2008). During the school holidays, they roam as ambulant vendors or as callers, the so-called Ranguman Footnote 5 (N'Diaye Reference N'Diaye2007; Dabo Reference Dabo2011), attracting customers to their relative's shop; or, they integrate their family's business into their student life, selling goods to fellow students in order to support themselves (Merchant No. 52, Ghana 2011 interview; Merchant No. 47, Senegal 2011 interview). Despite the ascent of educational investments, established norms and orders of market entry thus remain largely untouched.
In short, a general norm in Ghana and Senegal is that aspiring merchants obtain by their own hand the financial and social capital required for independent economic activity, as mediated by their particular social, religious and economic networks. Newcomers' entitlement to capital needs – such as training, market information and contacts, as well as commodities and loans – are the flipside of established merchants' obligations toward the very same networks that supported them in the initial stages of their own careers. Hence, by acting as gatekeepers to the market system – that is, by limiting their assistance only to members of their networks of accumulation – they guarantee the reproduction of the norms and orders of the market on their own terms, and prevent the ‘transformation of the country into a souk’ (Expert No. 70, Senegal 2011 interview). ‘Trade has a history,’ one Senegalese informant pointed out (Merchant No. 83, Senegal 2012 interview). ‘A real merchant does not waste his capital like the youth of the Centenaire’ (designed as a middle-class quartier, now famous for its street market and ‘Chinatown’ flavour) (Ibid.). Being a merchant, from this perspective, is about the rigour of engagement and absolute dedication to the business. In other words, a young merchant has learned the relevance of managing risks by separating private and business capital. She or he has a clear vision and business objective, and constantly seeks to secure the business by diversifying into new areas. The substantial gain in status motivates about 100,000 merchants in Senegal each to allow five to twenty apprentices to assimilate the relevant sociabilities of the market order (Trader No. 82, Senegal 2011 interview). However, many merchants point out that, ‘you cannot train everybody’ (Merchant No. 35, Senegal 2011 interview).
‘IRREGULAR’ MARKET ENTRY IN THE ABSENCE OF NETWORK ACCESS
Merchants in Ghana and Senegal monopolize and reproduce the established order on a day-to-day basis, by enforcing existing access restrictions and by constructing particular subject positions. An important social differentiation is thus upheld in market actors' accounts between those merchants initiated to the profession through their networks of accumulation and those who come to trade in the absence of such support networks. In order to demarcate this emic differentiation, we refer throughout this article to traders as those who belong to the ‘networks of survival’ category – though their economic success based on creativity and improvisation may prove this term to be misleading – and merchants as those embedded in ‘networks of accumulation’, in which implicit skills – such as diversification and management of entrepreneurial risks – are handed down from patron to apprentice in a normatively prescribed fashion. This difference has already been observed in historical ethnographic accounts that distinguish traders from merchants not on the basis of the commodities that they sell, but on their institutional organization – associated with rank, descent, ownership of property and/or their role in commercial and cultural relations (Middleton Reference Middleton2003).
The differentiation between traders and merchants prevails despite the steady increase in the number of market participants who have not undergone the normatively prescribed sequence of training and assimilation of ethics and business strategies. In particular, the national economic reforms that followed the wave of structural adjustment programmes orchestrated by the World Bank in the 1980s have led to a large influx of actors into the trade business, as cuts in formal employment and agricultural subsidies have effectively curtailed alternative income-generating opportunities (Overå Reference Overå2007). Similar to learning the trade profession, employment in most economic sectors of Ghana and Senegal is accessed through the ability to utilize one's membership of social networks – rather than through formal education or training (Chant and Jones Reference Chant and Jones2005). A strong preference towards employing one's kin persists throughout the entire economy of both countries (Velenchik Reference Velenchik1995; Collier and Garg Reference Collier and Garg1999; for youth employment in the form of apprenticeships, see Peil Reference Peil1970; for the trade sector, see Clark Reference Clark1994). While the boundaries of these networks may be flexibly extended, in order, for example, to integrate the daughters of close friends and colleagues, their exclusive nature remains remarkable and creates serious inequalities among youth, especially in urban contexts (GSS 2008; ANSD 2009). Official statistics show that a large number of people depend on petty trading for their livelihood. In Ghana, trade is the main economic activity after agricultural labour, employing 15.2 per cent of the working population (GSS 2008). More females (21.6 per cent) work in trade than males (8.4 per cent) (GSS 2008), though Overå (Reference Overå2007) has noted the emergence of a reverse trend since the inception of the structural adjustment programmes. As a survival strategy for people without formal education and training, petty trade also sustains large numbers of both internal and regional migrants. In Ghana, 19 per cent of migrants are internal, with the majority falling in the age range of 19 to 25. These numbers are comparable for Senegal, where about half of the population is under 20 years of age. Unemployment for both men (15 per cent) and women (25 per cent) is highest in this age group (ANSD 2009). The number of migrants in Dakar is currently estimated at around 20 per cent and, as in Accra (19 per cent), they come predominantly from other urban centres of the country (GSS 2008: 53; ANSD 2009: 382–92).
Although these traders sell in urban centres by the thousands, their presence is still not perceived as normal by either established merchants – who complain about customers conveniently buying off the street rather than entering their boutiques – or by public authorities, who can no longer keep track of the steadily growing trade activities – in terms of infrastructural and sanitary services, as well as tax collection (Expert No. 55, Ghana 2012 interview). Newcomers thus not only lack support from official bodies, but are also excluded from the socio-economic networks that create social control and trust, and thus mediate access to the institutions and relationships that grant more substantial market-based assistance – such as commodity loans as start-up capital. Only in exceptional circumstances do they receive assistance either from religious associations (dahiras in Dakar) or other social institutions, such as women's or prayer groups, who help them with short-term accommodation and/or food items. Limited in their activities to their networks of survival, traders consequently have fewer opportunities to accumulate substantial business capital and only slowly acquire the means to invest – achieved by saving in the so-called tontine (Senegal) or adashie (Ghana) credit pools, or in the susu saving system (Ghana). While credit associations are, above all, a means for women to pool resources so as to insure against unforeseeable events and losses, susu saving is an informal banking system that is open to any entrepreneur (Gabianu Reference Gabianu1990). However, although these means may in the long run allow one to accumulate a respectable sum, they do not always effectively secure the capital against claims by one's extended family and the wider networks of survival. Lacking the training and supervision of an experienced merchant, aspiring traders often do not differentiate between private and business expenses,Footnote 6 and thus face a higher risk of inadvertently losing their capital stock.
Nonetheless, in some instances exceptionally successful traders manage to grow their business to an impressive size and then settle down in a fixed boutique. This, however, does not alter their status as irregular actors in the market, who still are seen to represent a deviation from the norm. While basic marketing skills are extremely prevalent in Ghana and Senegal (Clark Reference Clark1994; ILO/DWCP, 2009 interview), a clear distinction is upheld between the mere act of selling and the complex socialization into the carefully reproduced order of the market. A trader will not be considered a ‘real’ merchant if the ‘codes of sociability’ (Elias Reference Elias1991) have not been respected. What distinguishes fully recognized merchants from traders is thus not, first and foremost, their amounts of stock, but rather their integration in the market networks. This integration manifests itself in the adherence to, and reproduction of, the norms of capital transfer – be it in the form of skills, contacts or material values – and, eventually, the investment decisions taken in light of these expectations. A ‘real merchant’ not only has the social obligation to redistribute wealth among the up-and-coming generation in his or her network, but has also internalized the ability to manage large amounts of capital and to reduce the risk inherent in its repeated rotation – by diversifying into new business prospects, such as machines, building and/or agricultural investments (Merchant No. 2, Ghana 2011 interview; Trader No. 49, Senegal 2011 interview). In the absence of these business strategies and ethics, while traders may refer to themselves as merchants – thereby emphasizing their personal economic success – they will not be recognized as such by fully socialized merchants in the relevant networks of accumulation.
NEW PATHWAYS TO MARKET ENTRY
Independent Chinese entrepreneurial migrants have started arriving in Senegal and Ghana during a time of major societal changes triggered by the aforementioned structural adjustment programmes, as well as by the world financial crisis and shifting regional migratory patterns. While these changes have increased competition in the market without as yet decisively democratizing resource access, the influx of Chinese migrants seems to represent a more defining factor in market access. Our fieldwork observations have revealed that – since the arrival of these Chinese migrants – newcomers' market access strategies have changed in three distinct ways. First, the low prices of commodities increasingly imported by the Chinese from their home country have allowed new actors to take up trade with a decisively lower entry barrier, and thus to operate independently from the external actors previously needed for start-up capital. Second, Chinese businesses have facilitated broader market entry as a result of constructing markets and selling spaces in entirely new areas for emerging social actors. Third, Chinese businesses in Accra and Dakar are employers of local youth, thus allowing the latter to acquire start-up capital and to access commodities for their own independent business endeavours.
Cheap Chinese goods and reduced entry barriers
The presence of Chinese entrepreneurs in Ghana and Senegal is often acknowledged as allowing low-income households to purchase new consumer goods and services. What is seldom stated, however, is the fact that this also lowers the entry barrier to the market for aspiring entrepreneurs. Hence, the Chinese presence allows previously excluded social groups – such as unemployed youth and others who lack access to the relevant market networks – to purchase commodities from Chinese stores and to re-sell them in the streets, in other markets or in other parts of the city. Anything from nail scissors to picture frames is sold, until the young trader is able to buy more expensive commodities in larger quantities. These traders are often unconditional supporters of the Chinese presence, and respond to the anti-Chinese protests voiced by commercial unions and associations with strong disapproval. ‘The Chinese are our friends. What they are saying at UNACOISFootnote 7 is their own business! For me, I want the Chinese to stay here, because it is in the Senegalese interest. The state does not give us work; the Chinese give us work!’ (Trader No. 44, Senegal 2011 interview). Almost in unison with their Senegalese counterparts, Ghanaian petty traders claim that ‘the Chinese are helping us, they bring us things [to sell]’ (Trader No. 5, Ghana 2011 interview). Although there are often shortages in the Chinese stores, due to the quick turnover of Chinese commodities and the inevitably short lifespan of consumer trends, these traders turn to other local suppliers for stock only in the absence of other options – as it is at street level that competition over prices is most strongly felt. With hundreds of sellers competing loudly for customers' attention, it is almost impossible to sell the same or a similar commodity at only a slightly higher price than one's competitors nearby (Trader No. 9, Ghana 2011 interview).
Aspiring traders take a risk when they diverge from typical petty income activities – such as selling fruit juices or home-cooked meals – to begin dealing in commodities instead. With Chinese-supplied commodities, however, the risk is minimal, as these suppliers – even though their primary intention is to retail wholesale – will sell even the smallest of quantities to whoever is capable of paying the agreed price. While many local wholesalers reserve particularly attractive stock for long-standing customers, Chinese importers are different in that they provide even newcomers with stock that is ‘moving systematically’ (Trader No. 9, Ghana 2011 interview) – which thus allows them to rotate their capital quickly, with greater effects in terms of accumulation. In this situation, the gradually increasing amounts of money saved in the tontine, susu and adashie systems allow newcomers to buy commodities from the Chinese whenever the money is released, thus facilitating either entry into the business or towards the next level of business size. ‘A thousand CFA francs a day for a period of six weeks shared between twenty-four to thirty persons who know each other in the market, give me fifty thousand CFA francs to invest,’ one jewellery seller revealed, describing the benefit of her tontine. Buying small pieces in the Chinese shops and re-selling them on trays in front of the same stores, she hopes eventually to make enough money to be able to go to The Gambia or to Mauritania – ‘to bring back scarves and perfumes' as her established merchant friends do (Trader No. 46, Senegal 2011 interview). In Ghana, women similarly operate credit pools in order to benefit from wholesale prices in the Chinese shops. Or, on a smaller scale, money is pooled by two or three sisters or friends, who then engage in the simultaneous sale of a particular Chinese commodity in different marketplaces (Trader No. 26, Ghana 2011 interview).
The cheap commodities offered by the Chinese suggest a livelihood to numerous new traders who initially had different plans and ambitions. With the barrier for market entry being significantly lowered by the Chinese presence, Ghanaian and Senegalese petty manufacturers – like shoemakers, carpenters and miners – are increasingly entering the retail business, as they see the opportunity to make greater profits in that sector than they would in their original professions. Over a period of only three months, one informant had more than tripled his initial investment (Trader No. 9, Ghana 2011 interview) – and when we revisited him eleven months later, he had quadrupled his business size and was now dreaming of opening his own regular shop at Makola in the near future. This phenomenon has also been observed in Dakar, where an informant stated that he had increased his capital ten-fold between 2009 and 2011 thanks to profit margins of over 10 per cent (Trader No. 44, Senegal 2011 interview). This turn towards trade activity also has to be seen, however, in the light of the heavy competition that cheap Chinese commodity imports are inflicting on local production (Lebale Reference Lebale2011). About a third of our respondents pointed out that they had an artisanal profession besides trade, but could not generate sufficient returns from manufacturing activities alone.
Yet other vendors migrate from the interior of the country, and benefit from the easy access to Chinese commodities by undertaking the selling of them as a complementary, seasonal activity. In Senegal, farmers come to Dakar during the fallow season to earn supplementary income. The conditions in the Centenaire allow them to improvise as traders and receive quick returns on their initial investments. ‘I come from Saloum; here, many come from Saloum. Most of them go back in June, the moment they can take up work in the fields. Here, we sell in order to buy the seeds. We have two professions’ (Trader No. 44, Senegal 2011 interview). As in Senegal, the rural–urban divide in Ghana is very pronounced and many Ghanaian small farmers follow similar strategies. Despite the fact that, statistically, employment opportunities are rarer in the cities than they are in agricultural work (GSS 2008), a continuous flow of rural migrants come to Accra in search of highly contested income opportunities. It is those newcomers who survive in the city without the support of an established relative who especially benefit from the Chinese as the providers of cheap commodities for sale (Trader No. 26, Ghana 2011 interview).
The appropriation of selling space
Since the early 2000s, substantial numbers of independent Chinese entrepreneurs have settled mainly around the former Boulevard Charles de Gaulle in Dakar's Centenaire, a quartier constructed in the 1960s for the local urban middle class, as well as around Zongo Lane in Accra. While these locations are not registered markets, the presence of the 150 to 250 Chinese-owned shops in each city has nonetheless facilitated the emergence of new trade centres. In addition to the Chinese stores, local traders have settled on sidewalks and vacant spots in front of these shops. In these locations, the wholesale customers of the Chinese businesses sell their imported commodities on trays, on the ground and/or as ambulant traders.
In Dakar, the right to use a boutique is acquired for an indefinite period from the municipality as a fond de commerce. In Sandaga market, about CFA50,000,000 (approximately €76,000) has to be paid for a boutique; in HLM market, CFA25,000,000 (approximately €38,000) is required. An unspoken rule decrees that the right of use must be passed on to one of the business's apprentices, rather than to a stranger, when the merchant decides to relinquish ownership of the store (Merchant No. 47, Senegal 2012 interview). In Ghana, on the other hand, shop space is rented out on a long-term basis, usually for a ten-year period with payment required upfront. The necessary capital for a boutique located in and around Accra's main market area is GHS50,000–80,000 (approximately €20,500–33,000). In addition to this down-payment, a monthly rent of GHS100 (about €45) also has to be paid. In many cases, third parties come into the tenancy agreement and can easily double the price of a boutique (Daily Guide 2012). There is, as in Senegal, an unspoken agreement between landlords and tenants to renew the contract and thus to allow successors to take over the boutique. However, since the arrival of capital-strong Chinese and other foreign businessmen and women, landlords now often choose simply to rent out to the highest bidder (Landlord No. 33, Ghana 2011 interview). This competition for affordable selling space continues in the smaller segments of the market as well. While stores in and around the marketplace are unaffordable to most newcomers, small sheds in the marketplace – made from either metal or wood – are much cheaper alternatives, but still nevertheless represent a significant financial obstacle if assistance from established merchants is absent. Senegalese traders complain, for example, that the security deposit alone (CFA450,000 or about €686) requested for a market stall exceeds the value of their commodities (Diallo Reference Diallo2011). In Accra, market stalls are, in principle, allocated by the municipal authorities, but the physical constructions are in reality privately owned and passed on to relatives.
In contrast to these financial barriers to market entry, ambulant traders in the streets only pay a daily tax of CFA150 in Dakar or GHS0.20 in Accra to the toll collectors from the municipalities. Over the course of a month, this adds up to between no more than €2 and €5. However, ambulant trade is generally caught between being legal and illegal – though traders may have a certain degree of formalization through business registration, it remains illegal to squat on sidewalks, in public places and in similar localities. Ambulant traders are thus regularly subject to police harassment, and so risk losing large amounts of capital in the form of fines or the confiscation of goods. This is in stark contrast to aspiring merchants who, supported by their network of accumulation, often start by selling on foot in the vicinity of a relative's store, which offers them protection from raids, fines and confiscations through the elder's status and their social obligation to steward and protect the newcomer (Trader No. 9, Ghana 2011 interview; Trader No. 21, Ghana 2011 interview; Diagne Reference Diagne2007; Diallo Reference Diallo2011).
Chinese businessmen, being unaware of or unconcerned by this practice as they do not have relatives who could claim the spaces adjacent to their shops, often tolerate traders who settle in their immediate vicinity. They thus facilitate access to selling space for entirely new social actors, who previously lacked access to kinship relations and other networks that potentially facilitate such arrangements. In these alternative arrangements with Chinese shop owners, traders are protected from the authorities. As one Senegalese informant put it, ‘I don't have a registration. If there is a control, I just make friends with a Senegalese working for the Chinese and they say that I work for them’ (Trader No. 45, Senegal 2011 interview). Others go as far as to appropriate space within the Chinese shop for night storage, thus making it possible to invest in bigger stocks. Traders in front of Chinese shops generally sell the same commodities as provided by the Chinese traders on a wholesale basis. This allows them, not least, to reserve certain stocks with the Chinese wholesaler, and circumvents the common problem of accessing attractive commodities at affordable prices (Trader No. 35, Ghana 2011 interview).
In turn, Chinese shop owners sometimes see the benefits of these arrangements to themselves – in the form of protection from theft, as well as convenient opportunities to monitor current retail trends. In both Ghana and Senegal, traders who closely interact with Chinese wholesalers perceive themselves as intermediaries. In practical terms, this translates into negotiations with tax officers on behalf of the Chinese shop owners (Employee No. 29, Ghana 2011 interview) – but most often takes the form of warnings about thieves, or ‘mystery shoppers’ who have been sent by the authorities (Employee No. 16, Ghana 2011 interview). This makes them feel like ‘privileged interlocutors of the Chinese with whom they negotiate directly’ (Trader No. 5, Senegal 2011 interview), and this in turn has marked (positive) psychological effects within a market system that does not fully recognize traders who have not undergone the normatively prescribed sequences of market entry.
Employment as financial and social capital
The third way in which Chinese entrepreneurial migrants provide new pathways into urban markets in Ghana and Senegal is through their employment of young people who would otherwise lack access to the relevant networks that facilitate employment opportunities, apprenticeships and, eventually, income opportunities. Like the enabled access to selling space, employment with Chinese entrepreneurs thus allows new, previously excluded social actors to engage in gainful economic activities. However, employment by the Chinese in Ghana is seldom perceived as a permanent employment option. Those working for Chinese businesses in Accra are usually very disillusioned, and – given their particularly marginalized position in the Ghanaian labour market – often take a job with a Chinese trader in the absence of alternative income opportunities. Since salaries are pared close to the minimum wage, and Chinese employers often fail to fulfil the local norm of supplementing low incomes with allowances and foodstuffs, options to save capital for private business endeavours are limited – and complaints about employment relations and the absence of future prospects are frequent (Giese and Thiel 2012). While in Ghana the employment of ten Ghanaians is legally binding for all foreign investments (though most businesses under observation employed no more than two or three Ghanaians, with the rest being fictive staff), Chinese businesses in Senegal are free to choose whether or not to employ local labour. In fact, many Chinese businesses in Dakar do not like to employ the Senegalese because they ‘steal our money in our absence of a mere five or ten minutes’ (Chinese Merchant No. 13, Senegal 2011 interview). Generally, however, every Chinese shop employs one or two young Senegalese. Employees of Chinese entrepreneurs in Ghana and Senegal serve customers, hold discussions with the local authorities who come to the shop, and organize the storage and processing of orders. In Senegal, these employees are day labourers, paid about CFA1,500–2,000 a day even though they may work for the same shop for several months. Only a few are paid monthly – at a rate of around CFA60,000 (Chinese Merchant No. 9, Senegal 2011 interview). In Ghana, a monthly salary of about GHS100–130 is the norm.
Employees of Chinese businesses in Dakar and Accra usually try to improve these meagre incomes with parallel activities both within and outside the shop. Hence, although the employment opportunities offered by the Chinese barely allow employees to save money, they sometimes help to facilitate the step into self-employment – as employees find creative means to appropriate the employment relationship for their own ends. While some Chinese employers actively encourage their employees to sell stock from the shop on their own account, and thus extend the reach of the business (Employee No. 25, Ghana 2011 interview), other cases are less licit. Many of the employees of Chinese businesses in Ghana interviewed by us make use of the frequent absences of their superiors to sell some of the stock entirely in their own interest – either stealing the commodities themselves or with the silent toleration of the Chinese employees of the shop. In yet other cases, escaping the attention of Chinese employers, their employees may make use of the weekly rhythm of accounting to sell merchandise outside of the Chinese shop – either through commodity loans to friends or business partners, or entirely on their own initiative – while keeping the surpluses they generate. One way or another, the local employees can actually supplement their salaries to the point where saving for a private business start-up becomes a feasible reality.
Another, more licit, form of harnessing the Chinese business is the guaranteeing of loans to customers acquainted with the Ghanaian employee – who agrees with his Chinese employer to carry the risk of a commodity loan to the customer in exchange for the interest payment (Employee No. 16, Ghana 2011 interview). Similar ‘services’ also include the reservation of stock against payment, or the notification of selected customers upon the arrival of new containers (Employee No. 28, Ghana 2011 interview). For example, two brothers – working with the consent of their Chinese employer – take a percentage of the sales for all customers that have been acquired through their contacts after every arrival of a new container (Employee No. 53, Senegal 2011 interview). Yet others work as a group: one member works for the Chinese store, while the others sell commodities that are bought in the markets of Dakar out of the employee's salary, thus boosting earnings with simultaneous returns (Trader No. 5, Senegal 2011 interview). ‘We earn more by doing business than by working for the Chinese’ (Employee No. 56, Senegal 2011 interview).
CONCLUSION: FROM NEW ACTORS TO NEW ORDERS
Traders in Ghanaian and Senegalese markets generally aspire to sharing the status and benefits enjoyed by established businessmen or women – who own big boutiques, regularly travel to China or other foreign commodity hubs, and who, most importantly, enhance their status by training youth in their professions. Disadvantaged in terms of market access, these traders face high barriers to the accumulation of larger capital stock; however, they are frequently able to overcome these barriers through creativity and effort. Nonetheless, traders are unlikely to attain parity of recognition with established merchants, because they have not undergone the normatively prescribed sequence of integration into the market – and thus lack knowledge of its codes of sociability. Recognized market entry in both Ghana and Senegal is regulated predominantly through relationships of patronage, and thus is determined by relevant kinship networks – which are backed and reinforced by religious (Muslim brotherhoods and Christian prayer groups) and social (commodity, hometown and funeral) associations. Market entry is thus restricted to members of these kinship groups and to associations that facilitate access to the relevant networks. Social networks thus continually reproduce established orders, manifest in the subject positions of the market and the mechanisms of inclusion and exclusion creating them. On the normative level, this finds expression in the socially enforced practices of mutual obligation and entitlement for assistance vis-à-vis particular groups, as well as the moral values (respect, authority) that are derived from adherence to them.
Since the substantial peak in Chinese entrepreneurial migration to Ghana and Senegal in the early 2000s, new pathways to market entry have become apparent, providing aspiring local traders with new entrepreneurial opportunities. The Chinese lack of concern with established constellations and practices in the market has facilitated the circumvention of accepted pathways to resource access. In creatively harnessing the potential of these new circumstances, previously excluded actors have pioneered new avenues for income generation. However, because they are bypassing, among other things, the role of elders, these new paths continue to meet with opposition from established merchants. This can be attributed partly to the absence of official recognition of the Chinese market areas in the first place. What is most significant, however, is the fact that newcomers are said to lack the necessary training in business ethics and strategies, which the alleged Chinese ‘patrons’ fail to provide. While those merchants who emerge through established networks are the beneficiaries of extensive training, experience and insight into the workings of the local market, newcomers who enter the market with the help of the Chinese are not taught any skills by the latter – but, in the best case scenario, learn only to imitate some of their entrepreneurial strategies.
Traders cooperating with Chinese businesses also often have a bad reputation within local commercial environments because they are not living up to the norm of returning parts of their profits to society.
These small Senegalese … it is they who register a business and then cooperate with the Chinese. They do not pay taxes, no duties [and] they import for the Chinese … but they do not have a fixed address; they are not reachable or controllable! The state does not keep up with them. As long as all these young people do this, they do not cause trouble. It is the state's valve for tranquillity. The needs of the population are satisfied thanks to the Chinese and the small saisai Footnote 8 are also satisfied. (Merchant No. 28, Senegal 2011 interview)
Many established merchants fear a loss of control over the market order with the rise of traders to respectable business sizes without their intervention and support. This shift in influence has also reached into the private domain, where emerging traders are suddenly now able to fulfil the role of provider – a position that was previously limited to the head(s) of the family. What lies at the heart of the merchants' consternation is thus undoubtedly that these developments are calling into question – and indeed undermining – the very foundations of the existing social hierarchy. ‘The youth are destabilizing the system,’ say established merchants. Or they lament that ‘the norms of the market are threatened by what happens in the Centenaire; the network of merchants is organized through strong solidarity among its members and also by social control. Questioning all of this means you no longer accept the leadership of certain families of merchants' (Merchant No. 21, Senegal 2011 interview). Ultimately, a perception of chaos and disorder has arisen – in the sense that African entrepreneurs remain in a state of confusion and uncertainty about these ongoing dynamics. While the new constellations are not (yet) recognized as correct and contextually appropriate, the effects of the process of change and reordering are nevertheless already clearly discernible. The changing orders of market entry are laden with emotion, which manifests in the tensions and conflicts prevalent among established merchants and migrant entrepreneurs from China. African businesspeople find themselves in a situation where they believe their activities are being threatened by the Chinese, as the perceived agents of disorder. Alongside trying to limit the activities of Chinese nationals in their territory, they also denounce their presence as illegal and declare their practices to be illicit competition. As we have argued elsewhere (Marfaing and Thiel Reference Marfaing and Thiel2011), it is not the commonly alleged encroachment on indigenous trade that upsets local merchants, but the realization that the Chinese presence has the potential to undermine and perhaps destroy traditional modes of interaction.
We interpret this development against the backdrop of a theoretical perspective in which the market order is seen as the empirical expression of the normative sense making that regulates interactions between economic actors, practices and institutions. Norms possess regulatory potential because of their existence above and beyond the individuals who obey them. In their collective recognition, social norms as a rule reproduce and reinforce established orders – in that they convey the moral justification for their enactment. As such, social norms reproduce the practices from which they are themselves derived, and vice versa. Norms of interactions in the market do not, then, derive from judicial codes, but are the result of lived habits and social practices (Foucault Reference Foucault, Defert and Ewald1994) – and thus the possibility for innovative forces to challenge and counteract them is ever present. Norms are collective in nature and relatively persistent over time, yet they are never completely fixed. Since, according to Foucault, the norm is the result of practice it is – per definition – malleable – and given that the norms underlying it also are, market order is simultaneously consistent but permeable.
Entrepreneurs in particular constantly manipulate the normative patterns of the social and cultural processes in which they are embedded in order to maximize individual goals (Stewart Reference Stewart1990: 150). Change in the normative order underlying entrepreneurial activity is thus often a result of the intrinsic tensions of the networked market system (Ibid.: 152), particularly when entrepreneurs face the conflict of interest between personal accumulation and the social obligation to provide for the next generation of market entrants. Yet, as we have shown, normative change can also originate from those outside of, or excluded from, the market system. It has been shown in our case study that when new actors or institutions – such as the increasing number of independent Chinese migrants and their businesses in Ghana and Senegal – settle in the market, they facilitate opportunities for the circumvention of established pathways to resource access, and thus enable entirely new social actors to achieve market entry. In light of the norm, these newcomers are expected to behave in a certain manner – and their entrance into the market through an unheralded facilitator is thus considered ‘abnormal’ in relation to the established practices of market entrance, and is also consequently perceived as being a source of disorder (Deleuze Reference Deleuze2004). Innovative participants thus constantly oscillate between norm and practice in order to benefit from the newly discovered networks and opportunities. Yet, while their initial behaviour may be seen as dis-ordering, their creative appropriation of the new situation may give way to re-ordering when their choices are eventually integrated into the established and normatively accepted repertoire of practices.
ACKNOWLEDGEMENTS
Research for this publication has been conducted as part of the ongoing project ‘Entrepreneurial Chinese migrants and petty African Entrepreneurs – local impacts of interaction in urban West Africa’, funded by the DFG Priority Programme ‘Adaptation and Creativity in Africa’ (Karsten Giese; Laurence Marfaing; Alena Thiel, being undertaken at GIGA, Hamburg).
