Informal trade crucial for job creation among women in Africa

But the recent hostility of Botswana’s locals to Zimbabwean traders has made buying wares in Botswana risky. ‘‘Before the problems began in Zimbabwe, we could move around without attracting any trouble, but now we have become targets. Some traders are mugged and their goods taken away,’’ she said.

The 30-year-old Khuzwayo complains that ‘‘the exchange rates are so volatile it has become difficult to price my wares to at least show a bit of profit’’.

The city’s markets have become centres of trade and finance where cross-border traders sell their wares and also source foreign exchange. For many residents struggling in a harsh economic environment amid growing shortages of basic commodities, cross-border traders have become the only suppliers of food.

Apart from groceries, cheap clothing from Botswana -- originally imported from China -- is the other essential product being sold in Bulawayo’s flea markets.

The dire economic circumstances have attracted thousands of women to informal trade in Bulawayo, a city of more than two million people. Recently even professionals like teachers and nurses have joined in to keep head above water.

The scarcity of foreign currency in Zimbabwe has meant that these small enterprises operate below capacity. It has forced cross-border traders to turn to the thriving illegal parallel market.

At the Plumtree border post, where thousands of Zimbabweans cross into Botswana each week, traders say it is becoming increasingly difficult to move goods. Groceries are now in short supply after a government decree forced retailers to slash prices by half, which left the supermarket shelves empty.

There was panic last month when the ZANU-PF government announced it was banning the importation of groceries from neighbouring countries as part of its price blitz against retailers. Without explanation, the government accused traders of fuelling the shortages of scarce basic commodities.

The authorities reversed the directive after a public outcry. The selling of commodities such as cooking oil, maize meal, shoes and clothing from Botswana in the streets of Bulawayo shows that informal cross-border trade continues despite the hardships faced by the thousands of women who have found a lifeline in this sector.

Traders point to the high import tariffs charged by Zimbabwean customs as one of the reasons for bringing limited volumes of goods into the country. Sometimes the customs duty is equivalent to the amount purchased from Botswana, reports another 27-year-old women trader at the Plumtree border post.

Although Zimbabwe and Botswana have signed a bilateral agreement on the avoidance of double taxation as part of what Zimbabwe sees as a move to bolster trade across the borders, yet these reports reveal that Zimbabwean authorities are still making life difficult for small-scale cross-border traders.

The continued economic instability in Zimbabwe has deprived informal cross-border traders of opportunities for growth. It has mainly hit the women who form a major part of the informal cross-border trading.

Despite the fact that there exists a fund created by the COMESA to assist small cross-border traders via its investment promotion and private sector development desk since 1997, there has been little participation by Zimbabwe in the initiative. In fact, Mavis Jubane of the Zimbabwe Informal Traders Association says not many people have heard about the COMESA initiative.

While life gets tough for the informal traders in Zimbabwe, petty traders in other parts of Africa engaging in cross-border small scale trading get benefited in the process.

Traders from Malawi mainly commuting to South African cities of Johannesburg, Durban and Cape Town and also to Harare, Zimbabwe, with pieces of cloth and food products such as flour and sugar bring back items of clothing, shoes, electronics and personal accessories from South Africa and butter, jam and tomato sauce, etc from Zimbabwe to sell in Malawi.

In fact the unstable conditions of Zimbabwe has made South Africa a favoured destination for  a lot of traders for their merchandise.Some traders also cross the borders into Mozambique, Zambia and Tanzania, bringing back goods. Those that have substantial amounts of money even fly as far as Kenya, Hong Kong, Dubai and Thailand to bring back electronics and apparel.

A survey conducted the National Association of Businesswomen (NABW), Malawi, in November 2006 estimated around 500 crossborder infoprmal traders in Mulanje alone, which is a district in south Malawi. NABW national credit coordinator Lackson Kapito says the country’s capital and the main commercial city of Blantyre are home to approximately 10,000 such traders while the country’s third largest city, Mzuzu, and the lake district of Mangochi have 2,000 each.

Economic analyst Mavuto Bamusi speaks highly of the effective role that informal cross-border traders are playing in the Malawian economy. He says this type of trade offers economic opportunities to women and youth in the country who would otherwise have remained unemployed.

‘‘The concern is that they usually face all kinds of social and economic injustices, such as harassment by public authorities, especially the tax department. They undergo unnecessary checks which are unregulated and they are forced to pay exorbitant taxes,’’ says Bamusi.

Another economic analyst, Abel Mwanyungwe, agrees with Bamusi about the function of informal cross-border trade. He says it is important to the country as it provides informal employment to many people who end up contributing to the country’s economy as they pay tax and are able to sustain their livelihoods and that of their families.

Mwanyungwe points out the lack of market research, information asymmetry in the sector and inadequate access to credit for the purpose. Overcoming these difficulties is likely to improve the overall situation of the small players in the sector.

It seems that the African governments should seriously look into the issues related to informal trading in terms of providing protection to the small players in the sector. It is important to assist them in developing methods of as well as benefiting more from such trading practices. This would lead to an overall improvement of the economy in the region.

Resource: www.ipsnews.net
Released on: 15 August 2007