Informal sector dominates cross-border trade - survey

Economic experts are calling for more focus on simple cross-border trade in order to boost incomes and living standards. The call was in reaction to a survey indicating that 82 per cent of cross border traders are in the informal sector. The report, “Deriving Maximum benefit from small scale cross-border trade between DR Congo and Rwanda”, released in Kigali on Thursday, was commissioned by Trade Mark East-Africa, Pro-femmes Twese Hamwe and International Alert. International Alert Country Coordinator Betty Mutesi presenting the research findings of the cross border trade yesterday at Grand Legacy Hotel. The most traded goods from Rwanda to the DR Congo, according to the survey, include agricultural produce, while those imported from DR Congo are manufactured commodities, mostly textiles. “Many of the traders sell goods on the streets; this is mostly the case for traders originating from Rwanda. About 46 per cent of traders from Rusizi, and 38 per cent from Rubavu sell their goods on streets, against 27 per cent of traders from Goma and 35 per cent from Bukavu,” reads the survey report in part. Conducting their business on the streets exposes these traders to harassment by police officers and street children, the report added. Presenting the findings, Betty Mutesi, International Alert’s country coordinator, said DR Congo eastern borders are the giant markets for Rwanda since they account for 80 per cent of Rwandan exports, followed by Burundi (11.5 per cent), Uganda (7.7 per cent) and Tanzania (0.1). The First Secretary at the embassy of the Netherlands Caro Pleysier (C) asks a question during the session. “The research confirmed that business between the two countries is the most viable and that it has continuously increased from time to time, hence the need to invest more in this trade,” she said. In order to scale up informal cross-border trade, the government has tasked a special unit at the Ministry of Trade and Industry to assess how best to support the traders to transform into the formal sector. According to trade expert Nathan Gashayija, the move to support these traders is timely. “The research is quite informative since it gives a clear picture of the cross-border trade,” said Gashaija, who is also the coordinator of EAC affair in the EAC Ministry. The Rwandan government plans to commission another feasibility study to assess all border communities in terms of trading gaps and challenges in a bid to draw a comprehensive policy that might see border markets constructed and removal of bureaucratic bottlenecks to trade. According to Hannington Namara, the Trade-Mark East Africa country director, four months ago, a special unit at the Ministry of Trade and Industry was created to devise modalities at which informal trade at the borders could be improved. Trade Mark East Africa Country Director Hannington Namara speaks about the research on cross border trade and looking on is Profemme Twese Hamwes Marguerite Mutumwinka. “Through the unit, we will discover what the constraints at hand are. Are there barriers to move informal trade into formal? Is it because of volumes or size? Based on data obtained, we will analyse what can be done to grow Rwanda’s exports,” he added. Traders, however, cite a lack of basic infrastructure and sanitation services, the payments of non-statutory fees and taxes, curfew times and continuous harassments from government agents, especially in the Bukavu and Goma areas, as some of the obstacles they face. According to the experts, increased support has the ability to transform the informal nature of the trade into a formal trade system. While regional focus has been concentrated on the bigger trading blocs, cross-border informal trade, if formalised, can boost exports, they said. Profemme Twese Hamwes Vice President Marguerite Mutumwinka making closing remarks.

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Informal sector dominates cross-border trade - survey