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| Informal Women Cross Border Traders from Elegu Border Post. |
Damali Ssali.
Uganda is
predominantly an informal exporter mainly trading with its neighbours.
According to 2014 Bank of Uganda (BoU) data, the country registered an informal
trade surplus. The 2014 BoU data indicates that informal trade accounted for
more than 30 per cent of all Ugandan exports, earning about Shs1.5 trillion.
DR Congo, which
fetched $139m, was Uganda’s largest informal exports destination followed by
South Sudan and Kenya, which fetched $119m and $92m respectively. Additionally,
data from BoU further indicates that informal cross-border exports earned a
combined $595m in the 2017/18 financial year with DR Congo continuing to
dominate as Uganda’s export destination fetching up to $291m in the period. It
was followed by Kenya at $149m, Rwanda and South Sudan at $54m each while
Tanzania fetched some $45m.
Agricultural
produce mainly beans, maize, sugar, other grains, bananas and fish as well as
locally manufactured goods, were the most informally exported items during the
period. Therefore, it is quite important and urgent that while priority
continues to be given to formal traders, some focus and steadfastness ought to
be directed towards informal cross-order traders too.
A 2015 study
conducted by United Nations Economic Commission for Africa indicated that
informal trade in Uganda provided more than 59 per cent of non-farm private
sector jobs, underscoring its significance in addressing the employment
challenge that Uganda finds herself in.
Different
studies indicate that more than70 per cent of women-owned businesses are in
informal trade, accounting for a significant majority of employment in this
sector. Women spend much of their income on uplifting family livelihoods,
including buying food, paying school fees and re-investing in their
enterprises.
Therefore,
informal trade, which is mainly dominated by women, must be supported to enable
women improve their disposable income to contribute towards social and economic
development. It is important to highlight that women informal cross-border
traders face a number of unique challenges that limit their growth opportunities.
Key among the
challenges is low knowledge of export requirements, lack of understanding of
quality inspection procedures, lack of information on markets, lack of access
to certification procedures and general gender-based harassment as well as the
general lack of appreciation for the certification processes.
The challenges
are compounded by the limited time that women have to invest in their
enterprises, therefore, they have to rely on middlemen to help them uplift and
get value for their businesses.
However, amid
all this, informal cross-border traders have been organising themselves into
associations, cooperatives, and Saccos, which will help them to reason and
speak with a single voice. Additionally, government through the ministries of
Trade, and East African Community Affairs, is addressing some of these
challenges by developing several policy frameworks such as Cross-Border Trade
Strategy, which seeks to increase the value of Uganda’s exports of the
specified products and services to the targeted markets over the next five
years. Other polices are Micro, Small and Medium Sized Enterprise Strategy and
the Cross-Border Trade Charter.
Government has
also appointed district commercial officers in every district and established
regional integration centres at some busy border points and Uganda Revenue
Authority is implementing the Women Trader’s Trade Facilitation Framework. Many
of these projects are being implemented by government with support from
development partners such as TradeMark East Africa, DANIDA and DFID, among
others.
However, even
with this kind of arrangement, there is need to ensure that the full spectrum
of informal cross-border traders is identified and supported to respond to
existing constraints such as non-tariff barriers, limited export capability,
lack of information, financing and exclusion of women.
This must be
mitigated by putting in place comprehensive interventions and policy regulatory
frameworks that support informal cross-border traders given that an
all-inclusive approach will ensure that Uganda leverages on its geographical
location to access the markets around it.
We also need to
enhance capacity of small and medium enterprises to provide products and
services that meet export standards to ensure easy penetration to
intra-regional markets.
This will not
only enhance cross-border trade but will also promote social and economic
development of Uganda.
Informal
cross-border trade provides a significant source of employment, which, if
enhanced, can be the bedrock of the socio-economic transformation of Uganda.
It is also an
economic buffer that can contribute to sustainable, inclusive and youth
employment.
Ms Damali Ssali is a Trade Development
Expert.
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