Don't leave informal cross-border traders out in the cold.

Author:Nevin, Tom
Position:AFRICAN ECONOMIC INTEGRATION
 
FREE EXCERPT

While members of three of Africa's largest trading blocs continue their discussions on greater intra-African economic and trade integration, the interests of one class of traders seem to have been ignored. These are the millions of informal traders who have plying their wares across border for centuries generating as much as $17bn annually. Tom Nevin makes the case for their inclusion in the discussions.

NEGOTIATIONS ARE ABOUT TO REsume on cross-border trade in Africa, generally accepted as the cornerstone of a strong economic foundation for the continent. These talks, within the ambit of Tripartite Free Trade Alliance (T-FTA) specifically engage the economic blocs of the Common Market of East and Southern Africa (Comesa), the East Africa Community (EAC) and the Southern African Development Community (SADC) as part of a process that will eventually lead to a continent-wide body called the African Economic Community (AEC).

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It is surprising, therefore, that one of the continent's most pressing issues, informal cross-border trade (ICBT), is conspicuous by its absence from the conference agenda.

In the words of Zimbabwe academic, Nsolo Mijere, now resident in Ethiopia: "The paradox of economic integration without the participation of the ordinary regional citizens and informal traders remains a dream of the political class."

The real challenge is to identify the extent to which ICBT can be factored into formal trade negotiations. And where to start? African merchants have been plying the import/ export trade for countless centuries, unhindered by border posts, customs officials and immigration stamps in passports and tariffs and taxes and other such inconveniences.

Official SADC treaty documents refer to ICBT as trade in legitimately produced goods and services which escape the regulatory framework set by governments, as such avoiding certain tax and regulatory burdens.

Women constitute about 70% of the informal cross-border traders in the SADC region, according to the United Nations Development Fund for Women. Most traders have no education and raise capital from their own resources. They are generally not bankable nor do they have assets that banks would accept as collateral. They can also be formally registered firms evading regulations and taxes or aiming to avoid border-crossing posts.

Just under half of such trading activity is considered illegal.

"This trade constitutes a significant proportion of regional...

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