Informal cross-border trade supports livelihoods, creates jobs and contributes to food security, eclipsing even formal trade at certain border posts. Enabling cross-border traders – most of whom are women – to flourish and to integrate into the formal economy would not only support gender equality, but would also boost trade and the private sector and, in turn, economy-wide growth and development.
This study finds that women’s predominance in this "borderline" activity is often a result of constraints on their time and mobility, reduced access to productive and financial resources, limited awareness of trade requirements and customs procedures, lengthy clearance processes and weak governance at the border.
Trading informally exposes women to several risks including the confiscation of their merchandise, sexual harassment and other abuses. UNCTAD's research finds that in most cases women’s trading activities as well as their capacity to diversify and upgrade is limited.
Simplified Trade Regimes (STRs) in place in the COMESA and EAC regions are meant to streamline trade procedures at the border and encourage traders to formalize their businesses. Under these arrangements, small-scale consignments of eligible goods are exempted from duties and benefit from simpler documentation requirements. The results of an UNCTAD survey, however, show that cross-border traders are not benefitting from the STRs as much as expected for several reasons. The list of eligible products does not fully match traders’ needs; the threshold value for consignments to benefit from the STRs is too low while the administrative burden is still high; traders have very limited awareness of the STRs and have difficulty accessing information about them.
To overcome the constraints that informal cross-border traders face and facilitate the formalization of their activities, the study recommends policy measures such as enhanced transparency of customs rules and procedures, improved infrastructure at the border, and a more accurate tailoring of the STRs to the needs of cross-border traders, especially women. Such policies would enable informal traders in these “borderline” activities to leverage their full economic potential.