Addis Abeba's Makeover Leaves Cooperative Workers Counting the Cost

Apr 18 , 2026. By DAGIM SEIFE ( FORTUNE STAFF WRITER )

Modernisation efforts are redrawing a city founded in the mid-1880s, replacing community hubs with walkways, bicycle lanes and flood-protection buffers. The transition of Addis Abeba into a diplomatic and tourism hub is fundamentally altering the survival strategies of its residents, testing the city’s legal and social safety nets, reports DAGIM SEIFE, Fortune Staff Writer

Awoke Tezera remembered how abruptly his life turned at the end of last year. A former manager of consumer cooperatives in around Sidist Kilo, he had spent years in a job that allowed him to support his wife and two children.

That stability ended when corridor and riverside development projects forced the closure of the Cooperative he managed.

The Cooperative had built a network of 30 retail shops, two flour mills, neighbourhood community centres and a hall. Its closure left around 120 employees without work.

“It happened unexpectedly,” Awoke said, recalling how he and his colleagues were dismissed within a short period.

The shutdown was followed by months of uncertainty. A dispute over severance payments broke out among workers, board members and officials of the Qirqos District. Attempts to settle the matter through negotiation failed, and the case proceeded to a labour court, which dragged on for six months. Only then did the workers receive their payments.

For Awoke, the consequences were immediate.

“After losing my job, it was difficult to support my family,” he said.

Until he found other work, he depended entirely on his wife’s monthly income to keep the household going. What troubled him most, though, was not his own hardship.

“Workers who had served more than 40 years, who have no other alternatives, came to my house crying and telling me their problems,” he said. “It was harder for them than for me.”

Many of those workers, older and physically frail, now face little chance of finding another job.

Markos Getaneh tells a similar story. He worked for 11 years in the community centres under the same cooperative structure in the Casanchis area. After losing his job, he remained unemployed for eight months and depended on relatives to support his wife and two children.

He later moved from Casanchis to Abado, on the city's northeastern outskirts, in search of a new livelihood and managed to rebuild his life through other work.

Not everyone managed the same recovery. He saw older colleagues in severe distress.

“When I walk down the street and see former staff members begging, I feel deeply saddened,” Markos said.

Their experience is a manifestation of a broader problem, leaders of the Federation of Industry Unions for Tourism, Hotels & General Services say, caused by the corridor development projects. The dislocations they brought about weakened several consumer cooperatives across the city.

A sweeping urban transformation is redrawing the face of Addis Abeba since its founding in the mid-1880s. The projects, which have already laid down 350Km of new walkways and 240Km of bicycle lanes across the city’s high-traffic districts, aspire to elevate the capital's standing as a modern diplomatic and tourism hub.

The "Beautifying Sheger" riverside project has reached its later stages, integrating flood-protection buffers with green public spaces.

However, this "creative destruction" comes with a steep price tag and social tension. Phase One of the corridor development alone cost taxpayers roughly 33 billion Birr and led to the relocation of over 11,000 residents, often with little notice or legal recourse. As the second phase sweeps through historic districts like Casanchis and Aware, the city has mandated a "grey makeover," where homeowners and businesses are compelled to adhere to uniform paint colours and aesthetic standards or face heavy fines and utility shut-offs.

Consumer cooperatives in Qirqos districts were completely demolished in districts 16, 17, and 18, leaving all staff members jobless.

These were part of Addis Abeba’s 164 consumer cooperatives in 2024, with 457,149 members across the city’s 11 districts commanding an estimated aggregate capital of nearly half a billion Birr in movable and immovable assets.

While redevelopment has shut down several of these cooperatives, the city government appears to be trying to return some of them to the urban system through relocation.

According to Sema Mulu, director of the Cooperative Expansion Directorate at the Addis Abeba Cooperatives Union, the consumer cooperatives demolished in Bole and Qirqos districts have been given substitute locations. Similar arrangements, he said, are being explored for others still displaced.

“The establishment of consumer cooperatives is based on demand from the community,” he told Fortune. “They’re formed in areas where the public expresses a need for them.”

However, the aggressive pace of redevelopment has squeezed the city’s informal economy. Delivery riders and local businesses find themselves sidelined by new road restrictions, fueling a debate over whether the drive for a 21st-century skyline is leaving the city’s most vulnerable residents behind.

According to Kassa Bisot, president of the Federation of Industry Unions for Tourism, Hotels and General Services, the effect on workers who depended on these cooperatives, numbered in thousands, has been immediate and severe. Negotiations failed to secure severance payments, prompting the Federation to take the matter to court.

The damage extends beyond the workers displaced by redevelopment. The number of consumer cooperatives has been falling over the years, weakening a sector that once played a crucial role in providing affordable goods and stable employment. Those still operating are facing internal pressures that affect efficiency and employee welfare.

The Federation, which represents workers’ unions rather than the cooperatives, blamed a revised board and administrative system for slowing decisions and delaying responses to employees’ concerns.

Kassa observed that efforts to engage internal staff and management have often been met with resistance.

“Discussions over workers’ issues are frequently unwelcome, narrowing the space for dialogue and resolution,” he told Fortune.

That lack of openness has strained relations between employees and cooperative leaders.

The Federation also argues that the new institutional framework is hard to navigate. Workers and their representatives struggle to present grievances or follow up on unresolved matters. The communications gap has prolonged disputes and delayed claims.

For many affected workers, the result has been a move into informal or alternative employment that offers less security and lower income. The weakening of job security in consumer cooperatives manifests wider structural problems in the sector.

The Federation’s leaders are calling for procedures that place workers’ rights first, improve institutional transparency and ensure timely compensation. Without such measures, they warn, the continuing decline of consumer cooperatives could further erode employment stability and weaken an important part of the urban economy.

Even the cooperatives that are still functioning are under pressure. Moges Abi, deputy manager and head of finance at a consumer cooperative in Qirqos District, Wereda 02 and 03, saw that rising costs and persistent supply shortages are making it harder for the cooperatives to operate.

“These pressures are limiting their ability to meet consumer demand and purchasing power in the market,” said Moges.

The gap between input costs and selling prices is putting further strain on already weakened structures.

Zerfe Hundie, general manager of Yawatal Consumer Cooperative in Lideta District’s Woreda 9, feels a similar squeeze. Managing and consolidating financial reports across different units, including the community centres and retail shops, has become more complex.

“The integration of those units has created administrative and financial management difficulties, especially in keeping reporting accurate and timely,” she said.

Zerfe echoed Moges in voicing supply-side problems, particularly in obtaining essential goods at workable prices. Meat is one illustration, which has become difficult to sell at 650 Br a kilo while sustaining operations.

These pressures underline the pressure on functioning cooperatives, where shortages, rising costs and administrative burdens are undermining their ability to operate efficiently and compete.

For Atelaw Alemu (PhD), an economist, the government intervention on the supply side is critical if consumer cooperatives are to survive and keep serving consumers at affordable prices. He argued that their future in an increasingly competitive market depends largely on how efficiently they obtain goods.

“If consumer cooperatives are forced to buy goods at high prices and sell them at lower prices, it’ll harm their viability,” he told Fortune.

He urged the city officials to play a more active role in creating direct links between cooperatives and producers. That would help cooperatives buy goods at more competitive prices and reduce their dependence on intermediaries who drive costs higher.

“Diversifying supply channels,” he said, “would improve efficiency and strengthen the bargaining position of consumer cooperatives in the market.”

Without such steps, Atelaw warned, consumer cooperatives risk losing competitiveness and gradually leaving the market. According to him, stronger supply chains are essential not only for the cooperatives’ survival but also for shielding consumers from market volatility.

PUBLISHED ON Apr 18,2026 [ VOL 27 , NO 1355]