About three-quarters of Africa's labour force makes a living in the informal economy. Street vendors and informal traders are an integral part of urban economies, offering easy access to a wide range of goods and services in public spaces.
They sell everything from fresh vegetables, to prepared foods, to consumer electronics. And for many of them, street vending is not just a means of survival, the business is also the main source of income for their family. So it makes sense to work to make this informal method of trading more efficient.
Ugandan startup, Musana Carts, is creating an army of solar-powered entrepreneurs by providing street vendors with specially-designed carts. Each cart comes with an eco-friendly stove, light bulbs and phone chargers, all powered by a solar panel. This product is particularly advantageous to street vendors who sell food.
Launched last year, Musana Carts aims to offer a path to a sustainable, reliable income for informal traders. The startup also provides access to finance, business and training, as well as a business license.
The Musana Carts team is made up of three passionate social entrepreneurs who met during their Master's program, and are now working together to transform the lives of urban street vendors in Africa and beyond. According to Musana Carts' strategic lead, Manon Lavaud:
"Low income, self-employed earners find it difficult to break into the formal economy due to, amongst other things, a lack of seed capital, poor existing business models and practices, and no clear route to legal licensing.
Musana Carts addresses these issues, offering street vending carts on a rent-to-own scheme, offering key trainings on how to run a business, providing financial advice and help to enable people to earn a better living."
A Musana Cart costs $600 (N220,000) to make. The startup then sells them for $750 (N273,750), with the vendor able to own it outright within one year. Vendors keep all sales revenue, and once they own the cart they pay a $10 monthly franchise fee for further training, branding and support. Currently, there are 10 Musana Carts in Kampala, impacting the lives of around 30 vendors. Vendors pay about $14 (N5,000) each week to complete the purchase of their cart.
While this seems a bit pricey, the logic is that with the cart they can do more. Make more money, fulfill more orders. And after one year, they're done.
Musana Carts has signed a deal with MTN for mobile money agents to be placed at carts, creating a new source of income for vendors. The startup was also one of the five finalists of last year’s Hult Prize, and they raised $25,000 (~N9 million) through a crowdfunding campaign early last year, in addition to $25,000 (~N9 million) seed funding from friends and family. The company is currently closing grant funding worth $100,000 (N36.5 million), and will shortly take part in the Unreasonable Institute Accelerator programme in Kampala.
Musana Carts' vision is impressive and it is real. There are more than 167 million street food vendors in Sub-Saharan Africa, many of them working illegally in businesses with very low profitability, lack of access to electricity, and the food-focused ones cook on stoves with high carbon emissions. And although they work more than 12-hour days, a lot of them go home with less than $5 (~N1800).
If Musana Carts' model can be replicated across Africa, and it is more than likely that it will, the company will help give rise to a new generation of informal traders - ones with sustainable incomes.