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Pandemic impacts Africa’s informal cross border trade

By Jehron Muhammad | Last updated: Jun 12, 2020 - 8:01:41 AM

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A recent episode of “Society Talks,” hosted each week by the South African-based Southern African Trust discussed “Food Security and how small holder farmers are critical to community.” The show is hosted by Christabel Phiri, who is the trust organization’s mobilization and engagement manager and assists small-scale female farmers. During an interview with Africa Watch, from her office in Johannesburg she discussed the important role informal cross border trade (ICBT) plays in the Motherland.


According to the United Nations Conference on Trade and Development, “Informal cross border trade has been a major characteristic of the African economic and social landscape, representing up to 40 percent of regional trade.”

Because of the flexibility it affords, the small startup capital it requires, and the earning opportunities it offers in border areas where no other alternatives are available, women make up the largest share of informal traders, representing 70 to 80 percent in some countries, she explained.

Ms. Phiri, whose passion is providing opportunities for women subsistence farmers, said that the reasons for “cross-border trade” has to do with “limited employment and economic opportunities.”

“So, people have to find what activity, what economic activity they could engage in that is easier and that does not require them to have high skills to be able to engage into it,” she said.

“Similar with agricultural (opportunities) it’s obvious the poverty levels are high (and) there are limited employment opportunities. There is the issue of having lower literacy levels in terms of not everybody having had access to education systems. So cross border trade has become an important economic activity for many citizens,” added Ms. Phiri.

Other reasons for cross border trade? There are ‘two aspects,’ cited Ms. Phiri. “They involve informal trade within the confounds of the country … and (informal) cross border trade. Many people that are not employed are in the informal economy. And then the other grouping are either involved in agriculture or subsistence farming as an economic activity and the other is the informal businesses or “cross border trade.”

She said what’s driving this informal economy or informal trade “is countries that are not able to produce everything that they require domestically. So, there is a demand for products that are produced in other countries.”

Ms. Phiri cited countries like Botswana, Zambia and Malawi as examples of countries that depend on exports. She said because South Africa is one of the most advanced countries in the region, a lot of products are being brought from South Africa and exported into other countries.

John Stuart an economist and policy analyst with special interest in trade, economic integration, data visualization and economic modeling says due to the coronavirus pandemic Sub-Saharan African (SSA) countries have “implemented all types of travel restrictions” including closed borders.

Using Cameroon and Rwanda as examples of informal cross border trade, in a piece titled: “Hitting Where it Hurts—Pandemic Border Closures and SSA’s Most Vulnerable Informal Cross Border Traders,” Mr. Stuart wrote: “Several SSA countries have closed their borders entirely and many others have implemented various types of travel restrictions … Cameroon and Rwanda—both host ICBT communities on multiple borders, most of them comprising populations close to or below the U.S. $1.9 per day poverty datum line.”

Mr. Stuart explained that these communities are vulnerable and live subsistence existences—requiring weekly trade in order to purchase essentials and survive. “Border closures and the resulting denial of access to markets therefore represent an existential threat to these communities,” he added.

The UN Conference on Trade and Development cites export bans or “introducing export licensing requirements while still keeping all commercial borders open, whereas some are only allowing transit of essential goods, aid and relief cargo. Others have instead restricted transit entirely by closing all borders. When cross-border trade is permitted, it mainly concerns larger commercial flows.”

Mr. Stuart believes that the cited coronavirus pandemic land border closures “should be undertaken with full cognizance of the potentially disastrous impact on small-scale border trade.” There is no doubt that Covid-19 action requires modification of human movement and economic activity, he explained. “However, the extent of the trade-off on the survival of fragile and vulnerable communities must be taken into account by the governments and authorities of SSA.”

What are some of the key constraints of small-scale women farmers?

Mercia Andrews from the South Africa-based Southern Africa Rural Women’s Assembly, during the Southern African Trust-sponsored Zoom forum, first stressed the importance of “small scale farming (that) plays important role in food production.”

The land rights activist said the discussion of food security was important in the context of the coronavirus pandemic. “I think it’s important to not only have this conversation in the light of the pandemic, but also to speak about the economic crisis as (in) the climate crisis. Despite the fact that small-scale farmers and producers—in fact 85 percent of them—produce the food in Africa and Southern Africa. Mostly they don’t get the recognition that they should.”

Focusing on the measures implemented by the South African government, she said, “Across the region we saw measures that (the) government put in place where it was to close (down) local markets to ensure that people didn’t have permits to go to their fields … the whole value chain from the small scale farmers to the local market was disrupted.”

The former teacher turned activist said the “disruption in the value chain” is an indication of how little the government understands.

“Our government understands (little) about the significance of small-scale producers. Women producers in particular, in spite the fact that they are at the village level … produce the products for the markets. They are the ones who support the local economy. All these factors were certainly not taken into account when there is a lockdown and measures, really severe measures are introduced,” Ms. Andrews stressed.

She cited an example where small-holder producers or farmers weren’t able to go to market. “This was across the region, but the region retail markets, large scale commercial markets could put their trucks, could deliver (their) fruit and vegetables across the region,” she explained. This issue is equivalent of where small “mom and pop” retail outlets in the U.S. were unable to open because they were classified as non-essential.

Ms. Andrews said, though this has been an ongoing concern, “it was just made visible during this (pandemic) crisis.” Follow @JehronMuhammad on Twitter