Informal cross-border trade in Sub-Saharan Africa offers a great deal of untapped potential to feed, integrate and industrialize the region, the African Development Bank (AfDB) has affirmed.

According to TradeMark Africa (TMA), an organisation works closely with East African Community (EAC) institutions to increase trade by unlocking economic potential, Cross Border Trade (CBT) plays an important role in poverty reduction. TMA argues that it provides trading opportunities for a good number of people.

TMA notes that in places like Rwanda, women are the most active traders along the country’s borders.

In fact, EAC Partner countries recognize that women make a significant contribution towards the process of socio-economic transformation and sustainable growth.

The States agree that it is impossible to implement effective programmes for the economic and social development of the Partner States without the full participation of women.

A study by the United Nations Food and Agriculture Organization in 2017 found that 70% of informal traders in the Southern African Development Community (SADC) region are women.

In West and Central Africa, informal cross-border trade among women represents more than 60% and generates about 40 to 60% of the Gross Domestic Product (GDP) of the countries concerned. This cross-border trade, which is driven by increasing population, growing urbanisation and agriculture, provides the foundation for a diversified and globally competitive economy.

The baseline studies, which were conducted in recent years in Sub-Saharan regional economic communities have demonstrated the positive impact of informal trade at both the macro and micro levels.

“Due to the constraints of access to formal jobs for women, many are turning to informal trade as an opportunity to meet the needs of their families. Informal trade is thus not simply an alternative to the limited number of formal jobs. But it is actually an employment and income-generating activity that helps to combat the concentration of poverty among women in Africa and a means of supporting families and to improve human development,” the AfDB said in a statement.

A United Nations for Women (UN Women) Survey conducted in 2011, women working in informal commerce employ more than one person in their businesses and support the needs of at least six people, who mostly include children and parents.

“Revenues from this trade are a source of social safety, provide basic needs like health, education, nutrition, and housing for families and improve the resilience of communities,” the AfDB confirmed.

In light of these developments, the African Development Bank has established its five strategic and operational priorities: encapsulated in Feed Africa, integrate Africa, industrialize Africa, light up Africa and improve the lives of people in Africa.

“Gender has been identified as a cross-cutting theme, systematically integrated into each of these priorities. Thus, through a gender perspective applied to the different priorities, the African Development Bank places women at the heart of development,” said the Bank.

In the same breath, the UN, through its United Nations Development Account, is working on a project to enhance informal cross-border trade. The initiative seeks to benefit a number of African countries, more specifically, Malawi, Tanzania and Zambia.

“By leveraging informal cross-border trade for the empowerment of women, poverty alleviation and peace-building, this project is linked to the greatest global challenge facing the world today: poverty eradication, security and socially inclusive development,” the United Nations Conference on Trade and Development (UNCTAD) commented.

UNCTAD’s initiative hopes to address the complexity and opacity of trade barriers to informal cross-border trade. Finally, the drive also seeks to determine how to accommodate the specificities of informal CBT when designing and implementing suitable supply side services that support cross-border trade flows.

Source footprint2africa

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.