The black market is an illicit market for goods and services. The market has no government oversight or taxation and it is purely driven by profit margins and consumer needs.
The black market exists due to numerous reasons and usually follows legal bans. The larger the demand for black market goods or services, the more likely participants continue to trade and avoid legal penalization. This would make it even harder to eliminate this trade if it continues to operate for a prolonged period of time.
Black markets can have a significant impact on the economy. They can distort prices, reduce government revenue, and increase crime. However, black markets can also provide needed goods and services to people who would otherwise be unable to obtain them. For example, black markets may be the only source of affordable medicine for people in developing countries.
If anyone should ever ask if the black market should be eliminated, the easy answer would be “Yes” but the realistic answer might be “No”. The black market may be corrupt and illegal but it’s also, especially in developing countries, a lifeline for people living in a broken system.
The pharmaceutical black market trade in Ethiopia
I assume the first thing you’d think of when talking about the black market in Ethiopia is the rampant black market foreign currency exchange. A profitable trade that over the years has grown so immensely that it has now almost doubled the normal bank currency exchange, but there is also another profitable shadow market that is rarely talked about and that’s the pharmaceutical black market.
The pharmaceutical black market in Ethiopia is a complex and illicit network that operates outside of the government's regulation. It is difficult to estimate the size of the market but it is thought to be significant. Over the years this market has expanded to include the majority of drugs circulating in the legal market such as over-the-counter, prescription, unregistered, and psychotropic drugs.
The black market is fueled by a number of factors including:
This illicit market is profitable at the expense of the country’s economy and prevents long-term economic growth. It destabilizes the economy as it;
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(International Narcotics Control Board https://www.incb.org/documents/Publications/AnnualReports/Thematic_chapters/English/AR_2002_E_Chapter_I.pdf )
The Grey Area
For the purpose of this blog, we talked with a customer, who chose to be anonymous, and who had just purchased chemotherapy drugs on the black market. When we asked why he didn’t purchase from a legitimate pharmacy his answer was “ I searched at almost all pharmacies in the city and they didn’t have it. What I’m supposed to do, leave my son in pain when I know where the drugs can be found?”
We can agree that the black market trade is illegal and detrimental to a country’s economy but where are the people expected to turn when the medicines they need can only be found in the black market? Hence the grey area of the black market trade.
The simple reason why the medicine can only be found in the black market could be that pharmaceutical distributors are unable to register the specific brand with the Ethiopian Food and Drug Administration or they believed it would be more profitable to sell the regular basic medications. Both don’t change the fact that the medicine can be found only on the black market and not in the legitimate market.
So how can we expect to abolish the black market pharmaceutical trade when it’s currently the place where desperate people in need of life-saving medications turn to? We can’t simply expect it to go away unless we’ve taken steps to ensure the medication can be found in the legitimate market.
What can be done?
Understanding why the black market trade is flourishing is the first step to controlling it. By identifying the root causes that drive individuals and organizations to engage in illicit activities, we can develop effective strategies to address these factors and reduce the demand for black market goods and services.
In recent years the National Bank of Ethiopia has made health-related imports such as medical equipment and medications duty-free but they are still taxable, so a possible solution could be to either decrease the taxes or completely provide a tax-free alternative. Expediting the registration process could also potentially help reduce the black market trade by increasing the availability and reducing prices of legitimate products.
The black and white of the law is clear; what is wrong is wrong and what is right is right, but we live in a world of grey where nothing is easy or clear. The black market trade is wrong but needed, unless we lay a system that ensures the availability and accessibility of pharmaceuticals this trade will continue while our economy suffers.
