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

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6 International Alert • A strategy to progressively formalise small cross-border trade should be established in order to allow traders to develop their business and thereby provide the state with higher levels of tax revenue. This requires a significant improvement in access to finances through the creation of guarantee funds and saving/credit schemes to be made available to the least well-off traders. Women should benefit from privileged access to financial resources under such schemes. • National policies should focus in particular on the role of women. For example, directives could be put in place to address the treatment of women at border crossings (e.g. women traders being searched). • Platforms should be established with support from local and international NGOs and in collaboration with the national authorities; these would allow government representatives and traders from all sides of the borders to meet at the various border crossings in order to improve the interaction and levels of trust between traders and public officials and ensure that the rights and responsibilities of all groups are respected. Particular efforts should be made to fully include women in this process, given the large number of women and the important role they play in cross-border trade. • In the development, revision and application of regional agreements for economic integration, organisations working in this area (The East African Community/EAC, The Common Market for Eastern and Southern Africa/COMESA and The Economic Community of the Great Lakes Countries or Communauté Économique des Pays des Grands Lacs/CEPGL), as well as national governments should take into account the particular challenges which exist (in particular those that affect women traders) and the importance of small cross-border trade as a means of economic survival. They should develop a strategy to monitor the problems encountered by small traders to ensure that their policies continue to be adapted to the realities on the ground.
Walking in the Dark: Informal Cross-border Trade in the Great Lakes Region 7 1. Introduction 1.1 Context, rationale and objectives Small cross-border trade plays an important role in the Great Lakes region, where goods are traded between DRC, Rwanda, Uganda and Burundi. 6 This trade is mostly informal insofar as the traders are not registered and pay no income taxes. However, they do pay export or import taxes accordingly and often pass through official border crossings with the appropriate travel documentation. They thereby contribute to the national economy, even though part of their operation is informal. It is for this reason that we refer to “small” or “informal” cross-border trade. Cross-border trade is crucial for the supply of products to countries which do not have an adequate provision of goods for individual consumption, such as certain foodstuffs. The importance of the role played by cross-border trade is made clear in Table 1, which displays the export and import values of cross-border trade recorded in the Great Lakes region in 2009. Table 1: Cross-border trade in the Great Lakes region (2009, $000) 7 Importer Burundi DRC Rwanda Uganda Burundi 7037 3291 426 Exporter DRC 652 5975 4346 Rwanda 1738 11392 3071 Uganda 28515 78307 141853 World 337649 1109830 4246228 Much of this cross-border trade is not carried out by large-scale traders, but instead by small traders who cross the border regularly. In the context of this report, small cross-border trade is defined as follows: any revenue-generating cross-border commercial activity with a daily transaction value of less than 100 US dollars (USD) per trader. This small trade is not only important for the supply of goods to the different regions concerned (this extends far beyond the specific border areas 8 ): it also provides a significant means of subsistence for small traders themselves. It is therefore a key survival mechanism in the absence of economic alternatives. The lack of diverse livelihoods has resulted from the many cycles of violent conflict which have affected the region (and continue to affect eastern DRC), and can also be linked to reforms that have deprived a segment of the population of their means of subsistence. As we will see, the revenue in most of the households concerned depends on this trade, which allows 6 There is also significant trade between Tanzania and DRC (especially via Kigoma and Uvira); however, this is not dealt with in our study. 7 World Bank (2011). ‘Facilitating cross-border trade between the DRC and Neighbors in the Great Lakes Region of Africa: Improving Conditions for Poor Traders’, Report No: 62992- AFR. Washington. 8 K. Titeca (2009). ‘The changing cross-border trade dynamics between north-western Uganda, north-eastern Congo and southern Sudan’, Crisis States Working Paper 63 series 2. London School of Economics and Political Science, Crisis States Research Centre, London; K. Titeca and T. De Herdt (2010). ‘Regulation, cross-border trade and practical norms in West Nile, north-western Uganda’, Africa 80(4), pp.573-594.
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