Walking in the Dark: informal Cross-border trade ... - International Alert

Walking in the Dark: Informal Cross-border Trade in the Great Lakes Region
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The main findings of this research are:
1. The revenue generated by trade is mostly spent on households to cover basic needs such as
food and schooling. Women in particular play an important role in this trade, as they make
up the majority of the traders and rely on it as their primary means of subsistence. Women
traders above all sell food produce with a low market value, whereas their male counterparts
sell a wider variety of products with a higher value.
2. Women traders face specific difficulties: they have the lowest levels of start-up capital, they
generally trade goods which generate the lowest levels of profit, and they face harassment at
the border, as well as a negative perception of their activities (except within their own family).
Furthermore, their commercial activities do not free them from their family responsibilities:
their work means they return home late in the evening and must then complete their household
chores.
3. For both male and female traders, access to capital is limited and mainly depends on
household resources. DRC specifically faces a further problem, that of informal taxes and
the many agencies with a presence on the border. In some cases this results in traders being
mistreated by public officials. The interviews carried out with traders revealed that they
had a preference for informal taxes as they were “negotiable”; however, (i) certain taxes are
not supposed to be paid and therefore constitute a violation of national laws, and (ii) these
taxes are based on informal agreements that are unpredictable, not sustainable and must
constantly be renegotiated.
4. The traders’ lack of awareness of their rights and responsibilities is a major problem. They are
generally unaware of tax rates, the different (national and regional) treaties and regulations
in force, and the specific roles and responsibilities of the various border agencies.
5. Relations between traders are sometimes fraught and they complain of discrimination,
harassment, among others, from their counterparts in other countries. These difficulties reflect
a climate of commercial competition, but they are also the result of a history of regional
violence now rooted in the population’s memory and which is reflected in the prejudices,
stereotypes and rumours used by one group against another. 5
6. The traders are often badly organised. A minority of them are members of associations or
cooperatives, and these are generally weak and tend to have competing relationships with
one another. The vast majority of traders who do not belong to an association or cooperatives
strongly desire to do so, but feel that this is beyond their capabilities.
The main recommendations based on this research, addressed respectively to the regional
governments, regional institutions and external actors, are as follows:
• The issue of the large number of informal taxes must be addressed. This above all concerns DRC
and Burundi, and should be resolved by correctly applying taxation rates, control mechanisms and
fines for those who fail to respect these regulations. In the case of DRC, this requires both national
and provincial authorities to strictly apply recent orders and decrees in order to limit the number
of authorised agencies working on the borders and eradicate illegal taxes.
• Small traders do not reject taxes as such, but are limited instead by opacity of the process,
the sheer number of taxes and excessively high tax rates. The national authorities, including
customs authorities, should provide traders with access to this information. Taxation should
be simplified (with a one-stop counter) and rates should be adapted to the financial resources
of small traders, as provided for in regional agreements.
• The governments in the region should put in place policies to promote small trade, especially
when exercised by women, by adopting fiscal policies which fight against poverty. This is
particularly important given the role played by small cross-border trade in the survival of the
population. The imposition of high taxes (in an effort to increase the state’s tax revenues) runs
the risk of stifling small-scale economic activities which provide a livelihood for hundreds of
thousands of people.
5 International Alert (2007). Words that kill: Rumors, prejudices, stereotypes and myths among the peoples of the Great Lakes of Africa. London.