NSA launches Informal Cross Border Trade report

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NSA launches Informal Cross Border Trade report

NSA launches Informal Cross Border Trade report
Photo credit: NSA

The Namibia Statistics Agency conducted an Informal Cross Border Trade Survey (ICBTS) in September 2015. This is the second ICBTS with the first one conducted in November 2014. NSA is therefore delighted to release the ICBTS report for the year 2015.

The Informal Cross Border Trade (ICBT) Survey is an economic survey covering transactions in merchandise across selected border posts. Such transactions are not captured under official statistics by Customs Authorities due to their values that are below the N$5 000 threshold required by Customs. However, when aggregated, these small transactions become significant due to their frequent occurrence. If properly harnessed, ICBT have the potential to support Namibia’s on-going efforts of poverty alleviation.

The results from the survey enhances compilation of merchandise trade statistics which feeds into the country’s balance of payment and national accounts. Additionally, the results influence the creation of a policy, regulatory, institutional and business environment which enhances the role of informal cross border traders and gradually mainstreams them into the formal economy.

The major objective of the survey was to establish the magnitude of unrecorded trade between Namibia and her neighbours (Angola, South Africa and Zambia) in order to improve the coverage of external trade statistics. The survey generated sufficient information on trade transactions including the commodities involved, their direction of trade and values of those commodities. The survey covered six border stations in 2015. However, it was not possible to cover every entry/exit point for Namibia, therefore some of the informal cross border trade transactions were not captured since border observation was only concentrated at selected border sites that experienced large informal trade flows.

Previously, the contribution of informal cross border trade to overall trade was understated by International Merchandise Trade Statistics compilers, thus, the findings from the survey will supplement the merchandise trade statistics data from customs and thus enhancing compilation of merchandise trade statistics which will aid comprehensive decisions for policy making.


Background

The 2015 informal Cross Border Trade Survey is the second ICBTS since inception, the first one was conducted in 2014. The survey aims at supplementing the merchandise trade statistics data from customs and thus enhancing compilation of merchandise trade statistics.

Informal cross border trade in general plays a significant role in avoiding widespread food insecurity in neighbouring countries. However, due to the unavailability of information relating to informal trade, its contribution towards redressing supply/demand imbalances has not been adequately quantified in many countries, Namibia included. In the absence of this crucial data, decision making by Government, Aid Agencies and Traders about the appropriate levels of commercial imports and exports of food aid becomes difficult.

Informal cross-border trade is an important component of a country’s informal sector as it has spill-over effects on trading countries, in particular the border towns. Informal Cross Border Trade have positive macroeconomic and social effects such as food security and income creation particularly for rural populations who would otherwise suffer from social exclusion. If properly harnessed, ICBT has the potential to support Namibia’s on-going efforts at poverty alleviation.

The ICBTS was jointly conducted with the Bank of Namibia (BoN) and the Ministry of Finance (MoF) who provide both technical and human resource support towards its implementation. The survey also benefited from support at various border posts by Customs officials and members of the Namibian police force who ensured the compliance from traders.

Survey Objectives

The broad objective of the ICBTS is to establish the size of unrecorded/informal trade flows between Namibia and her neighbouring countries with the exception of Botswana. Within this broad objective, the specific objectives of the survey were to:

  • Determine the nature and composition of commodities transacted under informal trade;

  • Establishing the direction of informal cross border trade by country of origin/destination;

  • Determine the volume and value of informal trade flow; and

  • Provide a comparative analysis of recorded and unrecorded trade including net trade balances.

  • To supplement official customs data by capturing transactions below customs threshold and aggregating this to formal IMTS for the particular month.

Overview of ICBTS

In most countries, Customs administrative documents are the primary source for formal trade data. However, the UN recommends all member states to supplement Customs data with non-Customs data to ensure full coverage of International Merchandise Trade Statistics (IMTS). Supplementary data can be obtained from various sources e.g. enterprise surveys, aircrafts and shipping registers, foreign shipping manifests, informal cross border trade etc.

In an effort to execute the UN’s recommendation, the NSA began by undertaking the Informal Cross Border Trade Surveys of which the first one to be done in Namibia was conducted in 2014.