By Regina Laub, Florence Tartanac and Cristina Scarpocchi
There are strong regional and continental level efforts towards formalizing trade within Africa. Despite these efforts, it is very common to see women crossing the borders with their heads and backs laden and arms overloaded with goods for sale. These traders are carrying goods that include industrial and agricultural commodities, they are engaged in what is known as “Informal Cross Border Trade (ICBT)”.
Many of the traders that are involved in ICBT are self-employed women. Very often their engagement in in informal trade gives them an entry point in selling their local produce. They would not be able to enter the formal sector due to various reasons, including difficulties in getting access to traveling documents or trading licenses, long waiting times at borders, overcharging by customs officials, and lack of knowledge of official procedures. Moreover, due to the nature of this trade and the lack of an adequate legal framework, the informal women traders traders are often faced with challenges such as corruption, where officials solicit bribes in order to smuggle goods, sexual abuse and confiscation of goods.
The objective of this paper is to highlight the potential women small traders can have in poverty reduction in many African countries and the need for policy makers at national and regional level to take into account their specific role and economic contribution and include measures to address the challenges they face in their day-to-day life in the negotiation of trade policies and regulations. This note is based on the experience and lessons learned from the work carried out at field and policy level to support women informal traders in the Great Lakes region, and specifically in Rwanda, within the framework of the Cross-border Trade Support Initiative led – since 2013 – by FAO, UN Women and other development partners.
70% of informal cross border traders are women in the SADC region (East Africa Community 2006).In some African countries informal regional trade flows represent up to 90 percent of official flows (Hall 2013; UN Economic Commission for Africa).The contribution of women informal traders to national GDP amounts to 64 percent of value added in trade in Benin, 46 percent in Mali and 41 percent in Chad (Charmes 2000, quoted in ILO 2004).Trade is the most important source of employment among self-employed women of Sub-Saharan Africa providing 60% of non-agricultural self-employment (ILO 2004).
Informal cross-border trade and its economic importance
ICBT refers to imports and exports of legitimately produced goods and services. The traded good or service does not pass formally through custom controls and therefore escapes the regulatory framework for taxation and other procedures set by the government. This form of trade is unrecorded and does not appear in official national statistics of the trading countries. It is complex and context-specific.
ICBT provides a significant contribution to national economies: In Africa, it is estimated that it represents 43 percent of official gross domestic product (GDP), this percentage is almost equivalent to the formal sector.
In Sub-Saharan Africa, ICBT features prominently among women’s individual strategies for self-employment, poverty reduction and wealth creation. Overall, trade provides 60 percent of non-agricultural self-employment to women in sub-Saharan Africa. For example, most of women’s small scale business between Rwanda and Burundi is informal. The types of goods these women trade include agricultural products mainly vegetables, such as tomatoes, peppers, cabbage, traditional vegetable varieties, carrots, peas, cucumber, maize, sorghum, beans, rice and maize flour and cassava.