Informal Cross-Border Traders Reduce Poverty, But Face Major Risks in Southern Africa

Scott Bobb
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Johannesburg

24 February 2010



Informal cross-border trade contributes significantly to the economies of southern African nations - about $17.6 billion a year - and helps reduce poverty.  But a group of researchers who met recently in South Africa say informal traders face many threats.  

Charity Mandishona was once a teacher in Zimbabwe.  But she left the profession years ago when hyperinflation destroyed her salary's buying power.  She says she and her husband, a former miner, ran a bar for a while, but it was destroyed by police five years ago in a major clean-up operation.

Mandishona now supports her family by selling Zimbabwean handcrafts in neighboring countries.

"At the moment with the economic situation, cross-border trading is much better because at least I can sustain the family and I can have a decent life," she said.

Mandishona was speaking at a recent workshop in Pretoria sponsored by the United Nations Development Fund for Women, known as UNIFEM.

UNIFEM Director for Southern Africa Nomcebo Manzini notes a recent survey of more than 700 informal cross-border traders in the region shows that trade contributes significantly to the number-one Millennium Goal, reducing poverty.


"Sub-Saharan Africa is probably going to be one of those regions of the world where poverty, instead of going down, is actually going to escalate.  So this work is particularly relevant in terms of ensuring that poverty is reduced in our sub-region," said Manzini.

She noted the trade is dominated by women, and as a result it could also help achieve another Millennium Goal, reducing gender inequality.

A Zimbabwean contributor to the survey, Joyce Malaba, told the gathering that informal cross-border trade is attractive to many, but carries many risks especially as they travel.

"Transport problems included taking too long, high cost of transport, accidents, loss of goods and cash through theft, general harassment and sexual harassment," she said.

Malaba says some women surveyed said they were obliged to trade sexual favors for safe accommodation. And informal traders of both sexes faced harassment and theft of their goods by local police, border guards and other officials during their trips.

They also face stiff competition from more established merchants who undercut their prices by importing cheap goods in bulk from Asia.

Another survey contributor, University of Swaziland Professor Winnie Madonsela, said there are very few civic groups supporting informal traders.

"There are couple of things that they [civic groups] could do, for example trying to help them [traders] with finding markets, and also to try and help them improve the quality of their wares," said Madonsela.

UNIFEM says informal cross-border trade accounts for one-third of all trade between members of the Southern African Development Community, but it is hardly recognized by SADC and other regional integration organizations.

Trader Mandishona said the groups and their member-governments need to recognize the trade contributes significantly to their gross domestic products.

"We want them to recognize that the informal traders contribute to the GDP and also to put legal frameworks which protect the cross-border traders," she said.

She says governments should punish officials who harass traders and should provide safe-houses where they can rest in security.  She also wants the governments to create micro-finance institutions to provide long-term loans for informal traders.

Finally UNIFEM officials advocate the creation of associations to press governments in the region to recognize informal cross-border traders and protect their rights.