PUBLISHED ON September 15th, 2023

Tough conditions, lack of finances hurting EAC’s small traders– lobby

Lack of access to information on trade regulations, violence and harassment and lack of access to finance are hurting women and youth-led businesses in East African Community’s cross-border trade.

This is according to the East African Women in Business Platform (EAWiBP).

Women cross-border traders also often face discrimination at the borders where they have high chances of being harassed by border officials, especially when they travel alone, with cases where they are charged higher fees than men.

Among the biggest impediments however is lack of information they need to navigate the complex trade rules and regulations despite the existence of a Simplified Trade Regime (STR) on customs procedures and documentation, leading to delays and penalties.

“Information asymmetry is still a major challenge facing small-scale traders in the EAC region,” said Janice Kimaro, Regional Coordinator at the EAWiBP.

About 47 per cent of women in cross border trade still use informal routes, according to a recent report by TradeMark Africa.

This equates to more than half of the businesses, where 80 per cent of trading is run by women.

According to TradeMark, the majority of the traders are unaware of Simplified Trade Regime (STR) on customs procedures and documentation, hence avoiding formal border posts leading to a higher cost of business.

STR, provided under the EAC Customs Union, is aimed at attracting small traders transacting regularly in low-value consignments.

The provision enables simplified certificate of origin, exempting consignments of goods that originate in the EAC and are valued under $2,000 (Sh292, 200) from payment of import duty in the EAC destination country.

Speaking during a training forum at the Namanga One Stop Border Post, on the Kenyan-Tanzania border, Kimaro said theer is need for continued capacity building initiatives to help address the challenges.

This, she said, will help small-scale traders to take advantage of the opportunities offered by the EAC bloc and the African Continental Free Trade Area (AfCFTA).

Majority also have difficulty accessing loans and other forms of financial assistance, the lobby group said.

This can make it difficult for them to start or expand their businesses.

The Namanga training benefitted about 60 women and youth SMEs from Kenya and Tanzania.

According to Kimaro, one possible solution is to create a digital platform that would provide small-scale traders with access to information about trade regulations, market prices, and other resources.

“This would help them to better compete in the market and make informed decisions about their businesses and providing real-time updates on the latest prices for goods, ensuring they are  always in the know,” she said.

The seminar was organized by the EAWiBP with support from the German Development Cooperation (GiZ).

It was part of the EAWiBP – GiZ project titled “Improving participation of women entrepreneurs (SMEs) in the EAC and AfCFTA integration processes”.

Kimaro urged the trade facilitation agencies from Kenya and Tanzania to do more to address challenges affecting small traders.

GiZ economic policy advisor Lamech Wesonga said the programme  aims to improve the efficiency of trade in the EAC region.

It provides training and technical assistance to businesses and government agencies to help them comply with trade regulations.

East African Business Council standards and NTBs manager, Frank Dafa, said youth and women provide the potential to boost productivity and strengthen inclusive economic growth in the EAC.

He highlighted the potential of women in priority sectors such as the agri-food chain to solve unemployment, food insecurity, rural poverty, and migration distress in the EAC.

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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.