Informal cross-border trading – review of the simplified trade regimes in east and southern Africa
This Trade Brief presents a discussion of the importance of Informal Cross-Border Trading (ICBT) for socio-economic development in the east and southern Africa region. Although accurate data on the volume of ICBT trade is limited, estimates range between 50-60% of total intra-Africa trade. With data limitations, however, such estimates are indicative and may even be an underestimate of the extent of ICBT in the region.
ICBT is important not only as a source of employment and supplementary family income in the wake of shrinking formal employment opportunities in the region, but also assists in eradicating poverty and contributes immensely towards food security. ICBT is thus an attractive option for many traders and if organised properly to engage with government, can have positive macro-economic and socio-economic benefits. Women, who are major players in this sector, stand to benefit most from any measures aimed at promoting ICBT.
To facilitate ICBT, member states from the EAC and COMESA have adopted a simplified trade regime (STR) consisting of instruments and mechanisms tailored to the trading requirements of small-scale traders that are decentralised to border areas where informal trade is rampant, and efforts are currently underway to develop an STR for intra-SADC trade. By looking at the existing STRs in the EAC and COMESA, this Trade Brief highlights some of the opportunities and challenges that ICBT face, and offers recommendations for supporting STR development in SADC.
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