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Rethinking informal cross-border trade in Africa

16 November, 2023
Rethinking informal cross-border trade in Africa

Cairo, Egypt, 16 November 2023 (ECA) - The Economic Commission for Africa (ECA), African Export Import Bank (Afreximbank), African Union Commission (AUC), and the Economic Community of West African States (ECOWAS) commission have shed light on the often-overlooked world of Informal Cross-Border Trade (ICBT) in Africa.

The lack of reliable data on ICBT has long hindered the development of targeted policies and interventions. To address this, a pilot project launched in 2019 along the Abidjan-Lagos corridor evolved into Phase II in 2022. This phase not only monitored official border crossings but also loading/offloading sites, providing a comprehensive view of ICBT dynamics.

Presented in Cairo during the 3rd Intra-African Trade Fair (IATF 2023) by Stephen Karingi, ECA’s Director of Regional Integration and Trade, the Phase II findings outlined in a report on ICBT in the ECOWAS region include gender-disaggregated insights. These shed light on the value and nature of products traded, cross-border facilitation challenges, and recommendations.

Key findings showed a four-month total value of ICBT at USD 22.8 million. Gender-disaggregated data emphasized women's 74% share in transactions, but men dominated in value, trading nearly four times more and dealing in a broader range of goods.

Recommendations include transforming trade corridors into smart corridors, establishing information centers, introducing a simplified trade regime, deploying ECOWAS National Biometric Identity Cards, establishing gender desks at border crossings, and mainstreaming gender into border officials' training.

These findings informed the development of the Continental Methodology for ICBT data collection in Africa by the AUC, Afreximbank, and ECA in collaboration with a Task Force comprising experts from various institutions.

Yusuf Daya, Afreximbank’s Director of AU/AfCFTA Relations and Trade Policy, highlighted the importance of ICBT as a “dominant economic activity across Africa,” noting that it accounts for “about USD 40 billion - according to some anecdotal evidence,” yet is often ignored in official statistics due to its informality.

Mr. Daya lauded ongoing collaborative efforts to develop the "AU-ECA-Afreximbank Continental ICBT Data Collection Framework and Methodology," which will enhance understanding of the value of ICBT and “ensure that informal traders are appropriately supported and capacitated.”

In the same vein, Massandjé Toure-Litse, ECOWAS Commissioner for Economic Affairs and Agriculture, expressed urgency in tackling the challenging issue of informal cross-border trade, deploring the fact that “official data indicate insignificant trade within West Africa, despite ECOWAS efforts.”

Albert Muchanga, AUC Commissioner for Economic Development, Trade, Tourism, Industry, and Minerals, commended ECA for the study's insights and emphasized the urgency for Africa to mainstream informal cross-border trade into formal intra-Africa trade. Outlining the next steps, Mr. Muchanga said the findings and recommendations will be taken to AUC’s specialized committees for review and adoption for continent-wide implementation.

This initiative underscores a collective commitment to addressing challenges and opportunities, marking a pivotal moment in reshaping Africa's economic landscape. It also signifies a significant step towards rethinking Africa's cross-border trade dynamics, ensuring that the invaluable contributions of informal trade are recognized, supported, and integrated into the broader economic landscape.

Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Tel: +251 11 551 5826