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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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.