Informality is pervasive across the developing world. It is estimated that a substantial share (30%-40%) of Africa’s regional trade is informal, and that four times as many cross border traders are likely to be operating outside the formal economy than within it. Cross-border trade can encourage entrepreneurial activity and regional trade integration, and create employment opportunities for vulnerable groups. In fact, a key feature of informal cross-border trade is that most traders are women, for whom such trade is often their main or even only source of income. UNCTAD’s research found that African cross-border traders, especially women, face various obstacles that hinder their growth opportunities. Obstacles at the border include poor facilities, cumbersome processes, weak governance, payment of undue fees, harassment, bribery, and corruption. Traders also face supply-side barriers, such as misinformation about customs procedures and regulations, lack of access to capital and assets, limited literacy and entrepreneurial skills, among others. Moreover, when crossing the border through unofficial paths, female traders can be subject to fines, confiscation of goods, and sexual assault. Among these obstacles, access to finance was identified as one of the most pressing challenges for traders. However, field findings also show that most women traders have a mobile phone, which can open up opportunities to enable them to become financially included. Innovative technologies like mobile-phone-enabled solutions can expand access to basic financial services. Mobile money, for example, enables individuals to store and transact money in digital form without the need of a bank account. Research has also...

COVID-19 is a global pandemic that has killed over 200 000 people, more than the World War II as observed by the UN Secretary General Antonio Gueterres. The IMF has summed the pandemic’s economic effects as the Great Lockdown that far exceeds effects of the 1930s Great Depression. Domestic and international trade has stalled save for trade in pharmaceuticals, protective equipment and other life-saving essentials as countries have closed their borders in an effort to contain the spread of the coronavirus. Stalling operationalisation of the African Continental Free Trade Agreement may be one of the major casualties of Covid-19 as discussions to postpone AfCFTA to January 2021 gain momentum. The rationale behind stalling AfCFTA in the face of the marauding Covid-19 is grudgingly acceptable as it sadly means delaying the onset of Africa’s industrialisation. AfCFTA is premised on the success associated with trade liberalisation which is also linked to trade facilitation. While in the short term, Micro Small Medium Enterprises (MSMEs) and women businesses may not benefit from trade liberalisation, it is in the long term that the country experiences welfare gains. This will be evident in growth of MSMEs, increased competition, economies of scale, reduced trade barriers, total growth of the economy, employment creation and positive flows to the fiscus. Women-owned businesses and MSMEs account for almost 70 percent of informal cross border trade. Women have been disproportionately affected by Covid-19 due to the multiple roles they play in the economy as workers, traders, tax payers and consumers. As...

In a 17-page document titled 'EAC Administrative Guidelines to Facilitate Movement of Goods and Services During the Covid-19 Pandemic' sent to the six partner states, the EAC Secretariat called on member states to enforce mandatory screening or testing of truck drivers and crew at border posts. Undertaking mobile monitoring during transit at selected inland points is also important, it said. Partner states were further advised to quarantine those with symptoms for 14 days under the supervision of the respective health ministries. To facilitate cross-border trade during the ongoing crisis occasioned by the novel coronavirus, member countries must adopt a multi-sectoral and coordinated approach, it said. They need to provide access at all designated points for entry and exit of goods and treat cross-border movement of trucks and cargo as essential services, the document underlined. Items to be prioritized as essential goods to mitigate the Covid-19 pandemic are food, fuel, medicaments, agricultural products and inputs, security supplies, emergency and humanitarian relief goods, it said. To mitigate critical shortages of equipment and supplies, member states need to promote local production of the items required to contain Covid-19, for example, medicaments, sanitizers, protective gear and ventilators, it said. “Partner states have further been advised to support the micro, small and medium enterprises (MSMEs) sector which employs many East Africans by exploring avenues to enable MSMEs to remain in business and expand as a foundation for the post-Covid-19 recovery process,” the statement reads in part. Transporters and transporters' associations must adhere to the requirement...

The Covid-19 pandemic is literally changing the way we live.. Several countries have imposed stringent lockdown measures a way of combating the dreaded disease. The Stay at Home restrictions have resulted into a slowdown of the social and economic life, with most activities coming to a near standstill and haunting images of empty streets from Lagos to Kampala, to Cape Town to Addis Ababa becoming part of the ‘new normal’. Unlike other global crises, such as the 2008 financial crisis, or the 2014 commodities crisis, which put stress on capital markets and the macro and formal economies, the Covid-19 pandemic has impacted both formal and informal economies. The lockdowns and curfews have had a disproportionate impact on the most vulnerable people of our societies; particularly women and the urban poor, who are mostly engaged in informal activities with a daily income, and do not have the luxury of working from home. Majority of the daily income earners, as well as micro and small entrepreneurs, will not be able to meet their loan obligations because their sources of income have literally dried up. Also, the collection of microfinance loans, which usually happens on a cash basis during weekly group meetings, has come to a halt as authorities have put in place strong social distancing guidelines. Most of these people have not only lost their livelihoods, in this Covid-19 lockdown, but have also lost the capital that they had for their informal activities. Such capital normally ranges from between $30 and $100....

The increasing calls for more economic protectionism spell disaster for Africa – and the UK must use its new freedom to rebut them Covid-19 has now spread to all corners of Africa and, as the rate of infections increase, the continent's economies are coming to a crashing halt, risking the reversal of two decades of economic progress. Trade has been the heartbeat of Africa's economic success, with the UK alone importing £12.7bn in goods and services from Africa in 2016, much of which from the agriculture sector. But this vital economic activity, and the millions of livelihoods it sustains, is under threat. Trade volumes in the East African Community are down by up to 25pc since the beginning of 2020, with even worse damage in the informal sector. There are warnings of a food security disaster on the continent. The threat is not only from Covid-19 itself. As Dr Dirk Willem te Velde, of the Overseas Development Institute, explains: "Some in the UK – and other large economies around the world – are arguing for autarky or increasingly protectionist policies that would wreak havoc on trade with Africa, often disguised as well-meaning social and environmental objectives, or attempts to protect domestic businesses and jobs. These protectionist voices must be resisted." Policymakers must understand the full consequences if stringent new production standards are imposed on imports, as some in the UK are calling for. Proxy export embargo Exports from much of Africa would be effectively locked out from the UK and...

Protectionism is seemingly on the rise and this, combined with the already devastating economic effects of the COVID-19 pandemic, may have serious repercussions for African trade. CNBC Africa spoke with Frank Matsaert, CEO of Trade Mark East Africa on how to keep trade between Africa and the rest of the world flowing. Source: CNBC Africa

COVID-19 has now spread to all corners of Africa and, as the rate of infections increase, the continent’s economies are coming to a crashing halt, risking the reversal of two decades of economic progress. Trade has been the heartbeat of Africa’s economic success, with the UK alone importing £12.7bn in goods and services from Africa in 2016, much of which from the agriculture sector. But this vital economic activity, and the millions of livelihoods it sustains, is under threat. Trade volumes in the East African Community are down by up to 25% since the beginning of 2020, with even worse damage in the informal sector. There are warnings of a food security disaster on the continent. The threat is not only from COVID-19 itself. As the Overseas Development Institute’s Dirk Willem te Velde explains: “Some in the UK – and other large economies around the world – are arguing for autarky or increasingly protectionist policies that would wreak havoc on trade with Africa, often disguised as well-meaning social and environmental objectives, or attempts to protect domestic businesses and jobs. These protectionist voices must be resisted.” Policy makers must understand the full consequences if stringent new production standards are imposed on imports, as some in the UK are calling for. Exports from much of Africa would be effectively locked-out from the UK and their other major markets around the world, leading to countless jobs being lost on the Continent where unemployment rates are already as high as 70%. At the same...

Trade in the East African community has been greatly affected by the COVID-19 pandemic with exports in the region declining by more than 60 per cent in the past two months according to the East Africa Business Council. Join this CNBC Africa panel of stakeholders and experts for more on this Source: CNBC Africa

The call is from Erastus Mwencha, the former Secretary-General of the Common Market for Eastern and Southern Africa (COMESA) and Tony Pengelly, the Director of the Secretariat for the UK All-Party Parliamentary Group for Trade Out of Poverty. Writing in The Daily Telegraph newspaper this week, they said: “Trade has been the heartbeat of Africa’s success, with the UK alone importing £12.7 billion in goods and services from Africa in 2016, much of which from the agriculture sector. “But this vital economic activity, and the millions of livelihoods it sustains, is under threat. “We must act now to keep trade with Africa flowing.” The writers noted that trade in the Eastern African Community had fallen by 25 per cent since the beginning of this year and warned of the danger of protectionist policies that were being advocated in the UK. “Policymakers must understand the full consequences if stringent new production standards are imposed on imports, as some in the UK are calling for. “Exports from much of Africa would be effectively locked out from the UK and their other major markets around the world, leading to countless jobs being lost on the continent, where unemployment rates are already as high as 70 per cent. “At the same time, British consumers would be denied goods such as Kenyan tea and green beans, or Ghanaian cocoa and fruit. “There are no winners in this situation,” write Mr Mwencha, who is also a former Deputy Chairman of the African Union Commission, and Mr...

The UK government has been urged to keep trade with Africa flowing in the midst of the COVID-19 pandemic that experts say is threatening to destroy 20 years of economic progress on the continent. The call comes from Erastus Mwencha, the former Secretary-General of the Common Market for Eastern and Southern Africa (COMESA) and Tony Pengelly, the Director of the Secretariat for the UK All-Party Parliamentary Group for Trade Out of Poverty. Writing in The Daily Telegraph newspaper this week, they said: “Trade has been the heartbeat of Africa’s success, with the UK alone importing £12.7 billion in goods and services from Africa in 2016, much of which from the agriculture sector. “But this vital economic activity, and the millions of livelihoods it sustains, is under threat. “We must act now to keep trade with Africa flowing.” The writers noted that trade in the Eastern African Community had fallen by 25 per cent since the beginning of this year and warned of the danger of protectionist policies that were being advocated in the UK. “Policymakers must understand the full consequences if stringent new production standards are imposed on imports, as some in the UK are calling for. “Exports from much of Africa would be effectively locked out from the UK and their other major markets around the world, leading to countless jobs being lost on the continent, where unemployment rates are already as high as 70 per cent. “At the same time, British consumers would be denied goods such as...