13 June 2021
Cross-border trade has broad poverty and development ramifications, especially for low-skilled women in border areas. It contributes to income, provides jobs, and empowers women across Africa. Because women’s empowerment is a key factor for economic and social development, making cross-border trade easy for small-scale traders is essential for supporting women. Cross-border trade is a female-intensive sector. According to the African Development Bank (AfDB), informal cross-border trade among women represents more than 60% of trade in West and Central Africa, and it generates about 40 to 60% of the Gross Domestic Product (GDP).
Involvement in cross-border trade benefits women and their households. Against this backdrop, governments, in collaboration with development agencies, should limit the barriers to small-scale cross-border traders in order to empower women to engage in this kind of trade. Women’s economic empowerment is central to realizing women’s rights and gender equality.
Cross-border trade is the exchange of goods and services between countries. It also involves the movement of people between countries, usually at the border point. Limitations on the movement of people and goods in the form of visa restrictions, customs duties, or security issues can affect cross-border trade. Cross-border trading involves both formal and informal trade. Unregistered traders engage in informal trade, which is a field dominated mainly by women. Informal trade is a significant yet unrecognized part of Africa’s economy, so policies for trade usually tend to overlook the barriers encountered in this sector.
Removing the barriers that affect women traders at the border would mean improving the level of success they’re able to achieve. When women are successful, the whole community benefits. Women’s economic empowerment boosts productivity, increases economic diversification and reduces income inequality. Some of the barriers affecting the success of small-scale women traders include
- Non-Tariff Barriers
- Poor Infrastructure
- Lack of Information
Non-Tariff Barriers (NTBs)
NTBs are provisional rules and processes, excluding tariffs. NTBs encountered by small-scale women entrepreneurs include excessive delays, ad hoc fees at the border, cumbersome document requirements, restrictive product standards, and regulations. These all add to the problems and costs of importing or exporting goods. According to the United Nations Conference on Trade and Development (UNCTAD), the limitations that NTBs place on cross-border trade is three times stronger than regular customs duties in African countries. The report suggested that African countries have the potential to possibly gain US$ 20 billion in GDP growth by eliminating these NTBs.
To begin deconstructing this barrier, the African Union in partnership with UNCTAD has established a website to allow people from all African business sectors, including informal traders, women, and youth business operators, to report obstacles they encounter when trading goods across intra-African borders. The website was set up to report, monitor, and eliminate NTB related issues. Once a complaint is lodged, the concerned government authorities are supposed to follow up and resolve the problem.
While the website is a start to help eliminate NTBs, small-scale traders who do not have access to the Internet or do not know how to use the Internet will still face these problems. Many informal traders are not aware of the site and do not own Internet-accessible phones. Another issue is that informal traders usually have little education, so they will need additional mechanisms to help them recognize an issue and report it.
A World Bank study found that Africa’s poor state of infrastructure negatively affected economic growth and lowered business productivity. Bad roads are one of the barriers that limit the effectiveness of small-scale traders in Africa. Poor quality roads and weak transport infrastructure is an ongoing issue for African trade. Africa has poorly maintained roads, with a significant number (around 53%) remaining unpaved, which causes a delay in road travel. The lack of adequate public and private transportation systems also causes delays.
Roads that link to border communities can often prolong the transportation of goods because of the time it takes to get to the border and back. As a result, perishable goods can be destroyed before getting to the point of trade. Delays caused by bad roads increase the cost of doing business for women traders who often trade in perishable food items.
Lack of Information
Information about duties, tariffs, rules, and regulations applicable to cross-border trade is not readily available to small-scale traders. At a regional workshop organized by UNCTAD, Tanzania’s development minister Ummy Mwalimu noted that “women traders do not fully understand customs policies and procedures.” This lack of information about document requirements, product standards, and some other NTBs affects small-scale women traders’ ability to trade easily.
Governments should provide the necessary information through continuous, direct engagement in the form of workshops that facilitate communication between informal cross-border traders and customs representatives.
Cross-border criminal activities like armed robbery, sexual harassment and assault, and the presence of rebel or terrorist groups present an obstacle to smooth trade for women. These activities are sometimes occurring while traders are on the roads to and from the border. Traders with cash on them are at risk of having their money taken. Traders also face the risk of losing their goods. At the border of northern Mali, armed groups with highly sophisticated weapons have reduced the activities of security officials, leading to increased insecurity for traders. High incidences of rapes are present in some regions. Border security is essential to allow women to trade hassle-free.
Addressing these barriers would take a concerted effort between African governments who share borders and who are committed to increasing women’s participation in the economy and intra-African trade.
To tackle these barriers and ease cross-border trade for small-scale women entrepreneurs, we recommend these measures:
- Improving trade policies,
- Opening a dialogue with border officials, and
- providing trade training
In addition, governments should consistently create access to information through seminars, workshops, and trade fairs for women cross-border traders.
Improving trade policies:
Governments need to be conscious of the importance of women entrepreneurs in cross-border trade and develop women-friendly policies that will limit the barriers NTBs cause. Governments should consider gender-related issues, like rape and sexual harassment when creating border trade policies. Policies that address gender-specific matters confronting small-scale women traders will help make cross-border trading easier. Cross-border trade policies should be inclusive and allow small-scale traders to carry out their trading activities without hindrances.
Opening a dialogue with border agents
Customs and border agents need the means to dialogue and interact with small-scale women entrepreneurs. Dialoguing with border agents would allow women traders to gain knowledge on border and market information. The relationship established from having a dialogue with customs officials can make trading at the border a little easier. A town hall discussion with stakeholders will allow small-scale traders to learn about different trading rules and regulations at the border. As a result, small-scale traders would also be able to influence the activities, discussions, and implementation of policies affecting cross-border trade as it relates to them.
Getting access to crucial information about trade rules and procedures is vital for small-scale women traders. They are usually not adequately informed about custom requirements, trade rules, and policies. The lack of trade knowledge can make cross-border trade difficult. For small-scale women entrepreneurs to succeed, they will need to acquire the necessary trade skills and knowledge of customs duties, tariffs, and non-tariff barriers.
Providing training would help small-scale women gain the knowledge they need to improve their cross-border trade experience. Jane Phiri, a small-scale trader from Chipata in Zambia, attests to the benefit of training she received. UNCTAD organized the training on trade rules and procedures and entrepreneurship. Regarding the training, Jane said, “This training is very helpful. We now know more about cross-border trade issues and will be crossing the border with courage and confidence.” The provision of training will enhance traders’ profitability as well as make these women traders more successful.
We can eliminate barriers confronting small-scale women entrepreneurs at the borders, if governments, development partners, and business support organizations focus on removing or limiting the harsh effects. Improving trade policies, creating open communication with border officers, and providing training will help ease small-scale women entrepreneurs’ rigid processes as they engage in cross-border trade. Most communities along the borders in Africa get their livelihood from trading activities, of which women make up a large percentage, over 70 percent. Easing cross-border trade for small-scale women entrepreneurs could help alleviate poverty and promote intra-African trade, which can help contribute to the economic development of local communities and Africa as a whole.
Source: KilSah Consulting