44 MiddleEast&Africa TheEconomistMay28th 2022
Behindallthisthequestionarises:how
much more can Issaias’s longsuffering
citizensendure?Toanswerthisa reporter
forTheEconomistrecentlytravelledtoEri
trea,whichnormallybarsforeignjournal
ists.Mostpeopleinterviewedwerescepti
calaboutwinningtheconflictagainstthe
tplfandblamedIssaiasfordraggingEri
treaintoit.“Wearetiredofwar,”saysa
priest.“Ourchildrenaredyingforsome
thingthathasnobenefitforus.”
Cafésandbarsoncepackedwithyoung
peoplearemostly empty.At thecentral
marketinAsmarapilesoffruitarerotting
inthestalls,whileshelvesintheshopsare
almostbare,saveforwhatcanbesmuggled
infromSudan.Withtheoutbreakofwar
the flow of contraband from Ethiopia
abruptlystopped.Chemists arerunning
lowonmedicineasbasicaspainkillers.
Evenbeforethewar,Eritrea’ssystemof
indefinite national conscription had
turneditintooneoftheworld’sfastest
emptyingcountries.Fewyoungstersnow
leavetheirhomesafterdarkforfearofbe
ing pressganged. Military roundups
seemto be intensifying:anewtraining
campnearAsmaraopenedinMarch.Every
monthhundredsofpeoplefleeacrossthe
bordertoSudan.“Eritreaislikea giantpri
son,”saysMulugeta.Emigrationdrainsthe
pool ofpotential conscripts,but italso
makesresistancetoIssaias’srule—andhis
war—lesslikely.
Another question concerns the rela
tionshipbetweenAbiyandIssaias.“Abiy
wantsthewartoend,soIssaiasisunhap
py,”saysanEritreanworkingata foreign
embassyinAsmara. InJanuary, theday
afterAbiyreleasedsometplfleadersfrom
prison,Issaiasgaveaninterviewinwhich
he,ineffect,claimedtherighttointervene
inEthiopiatoeliminatethetplf’s“trou
blemaking”.Sincethen,Abiyhasmadesev
eralvisitstoAsmara,perhapstopersuade
Issaiasnotto undermine the truce.“So
long as Issaias continues to meddle in
Ethiopia’sdomesticaffairs, peaceis un
likely,”warnsanEthiopiandiplomat.OneEritreanaimmaybetoblockTi
grayan forces from reaching the border
withSudan,whichtheycouldusetobring
insupplies.“Ifthetplfgetsaccess,that
meansEritrea’ssecuritywillbecompro
mised,”saysa soldierinAsmara.Thisalso
rattlesofficialsinAmhara,a regiontothe
southofTigray,whoseforcesarebattling
to controlterritoryalongSudan’sborder
thattheyseizedatthestartofthewar.Am
hara’s commandershavedrawnclose to
their counterpartsin Eritrea, who have
hostedandtrainedthousandsofAmhara
militiamen.InthepastweekAbiy’sgov
ernmenthasarrestedthousandsofcritics
andmilitialeadersinAmhara,perhapsto
reducetheriskofthatregionbecominga
threattothefederalgovernment.
Hopesforpeacearestillalive.Tigrayan
andEthiopiancommandersareinregular
touch.Hundredsofaidlorriesarebeinglet
into Tigray, though not yet enough of
them.Thisweekthetplffreedthousands
ofprisonersofwar.Yetbothsidesarealso
preparingforanotherroundoffighting.
OnMay2ndthetplfsaidit expecteda new
offensivefromEritrea.AweeklaterEthio
pianofficialsaccusedthetplfofattacking
EritreanforcesatRamaandBadme,theve
rysiteofthebattlethatsparkedtheborder
war in1998.A single misstepcould yet
againleadtocalamity.nAmharaAfarAmhara
militiaSUDANDJIBOUTIAsmaraBadmeMilitary training camp
EritreanforcesTigrayDefence
ForcesMixed/
unclear Tigray
border
ETHIOPIAERITREARed SeaAreasofcontrol,May222
Sources:Polgeonow.com;@MapEthiopia 15 kmB2BstartupsClicks and
middlemen
T
o the untrainedeye Wakulima mar
ket in Nairobi, Kenya’s capital, looks
like pandemonium. Scores of workers
push handcarts laden with fruit and vege
tables, jostling past heaving crowds. Buy
ers and sellers loudly debate the quality of
a papaya or the merits of an onion. It seems
chaotic. But not to James. The wholesaler
(who asked that his surname not be used)
gazes serenely as hirelings toss pineapples
out of an open lorry, while others arrange
the spiky fruit in a dozen piles of varying
price, size and juiciness.
James is one of many middlemen keep
ing Kenyans fed. He buys produce from
brokers, who have bought from farmers.
Transporters take the goods to Wakulima,
where James sells to informal retailers,
who take the food to street stalls or kiosks,
where they sell small amounts to custom
ers. “This is a good business,” he says. Does
he not worry about competitors? He shakes
his head. “Of course, we agree on prices.”
Middlemen are crucial to shoppingacross Africa. Many consumers are too
poor to buy more than a few goods at once,
or to travel to large shops, so they rely on
informal vendors. These account for about
90% of retail transactions in Africa. But it
is too costly for these smallscale sellers to
source directly from farmers or manufac
turers, so they rely on middlemen, often
buying at wholesale markets.
These supply chains ensure goods get
to every nook and cranny. But research sug
gests that relying on middlemen means, at
best, lots of markups and, at worst, that
middlemen act like cartels, keeping prices
low for producers and high for consumers.
More promisingly, these inefficiencies
have created opportunities for ecom
merce startups, which are disrupting tradi
tional ways of doing business.
Academic evidence points to the mar
ket power of established middlemen. In a
paper published in 2020, Lauren Falcao
Bergquist and Michael Dinerstein, respec
tively of the Universities of Michigan and
Chicago, studied Kenyan maize markets.
To test the extent of competition among
the traders who sell maize at wholesale
markets, the researchers handed out a sub
sidy per kilogram sold by the traders. In a
wellfunctioning market lower costs for
sellers would mean lower prices for buy
ers. But the middlemen passed on just 22%
of the reduced costs.
An earlier paper by David Atkin and
Dave Donaldson, today both at the Massa
chusetts Institute of Technology, looked at
the cost of getting goods from ato bin
Ethiopia and Nigeria. They found that it
was four to five times more expensive than
equivalent journeys from wholesaler to re
tailer in America, a difference that largely
remained after controlling for the quality
of the roads. One reason for the gap was the
role of intermediaries. The authors noted
that when the prices of the relevant goodsTATU CITY
How ecommerce differs in Africa The measure of the market