60112 Risky Business: Poor Women Cross-Border Traders in the Africa Trade Policy Notes Great Lakes Region of Africa Note #11 Paul Brenton, Celestin Bashinge Bucekuderhwa, Caroline Hossein, Shiho Nagaki, and Jean Baptiste Ntagoma January 2011 Introduction There is enormous potential for international demands for a wider range of goods and services trade to drive economic growth and poverty and enhance the scope for mutually beneficial reduction in the Great Lakes region of Africa. cross-border exchanges between the DRC and Much of the attention on eastern DRC has been the other countries of the Great Lakes region in focused on the minerals sector, yet there is agriculture, manufactures and services. substantial scope to expand output of other sectors, especially agriculture,1 but also services. Currently it is informal cross-border trade that While an improvement in the security situation plays the main role in linking producers to is necessary for agricultural output to recover, markets in the Great Lakes region of Africa.2 greater economic opportunities and rising living Cross-border exchange provides the main source standards will contribute to greater stability. For of income for a large number of informal traders example, increasing returns to agricultural who are predominantly poor women carrying activities can provide a genuine alternative agricultural products and hence there is an occupation and source of income to artisanal important gender dimension to this issue. There mining and thus facilitate the shift to a more is however, very little information on these organized and less disruptive mining sector. traders and the conditions that they experience.3 This note summarises the results of a study that Harnessing the opportunities of regional and has looked at cross border trade between the international markets will play a key role in DRC and Burundi, Rwanda and Uganda. The delivering higher returns to farmers and conclusions are stark: the livelihoods and contributing to food security by making food activities of these women traders are currently products more widely available and at lower being undermined by high levels of harassment prices to consumers throughout the region. and physical violence at the border and the Cross-border trade will become increasingly prevalence of unofficial payments and bribes. As important in linking food surplus areas to food such cross-border trade is nothing more than a deficit areas, especially as development is mode of survival for these women rather than an accompanied, and driven, by the increasing opportunity for growth and development. concentration of people and activities in towns and cities. Rising incomes will lead to increasing 1 Evidence from other regions suggests that Figure 1: Key Border Crossings in the Great informal cross-border trade is highly sensitive to Lakes Region the way that traders are treated and the conditions that they face in crossing the border (World Bank 2010). The success of such trade depends upon the ability of individuals to routinely cross the border without be subject to violence or harassment and without having to pay large unofficial payments or prohibitive tariffs or charges. Supporting these entrepreneurs in growing their business and moving to more organized and then formal modes of exchange will be crucial if the potential for cross-border trade in the region is to be realized. The first step must be to improve conditions at the border. The Characteristics of Cross-Border Traders in the Great Lakes Region Cross-border traders in the Great Lakes region play a vital role in bringing goods to consumers that would otherwise be unavailable and providing them at lower prices. If these poor entrepreneurs were not to ply their trade prices would be higher. Their activities also entail that farmers receive higher returns for their products The survey obtained information from 181 than they would otherwise. Nevertheless, traders through in depth interviews (100) and substantial differences in the prices of basic food focus groups (81). This was supplemented by 58 products remain between markets on opposite interviews with stakeholders at the border. The sides of borders, reflecting that there are key features of cross-border trade that emerge significant impediments to the movements of from this investigation are: goods and people across borders in the Great Lakes region. Removing these constraints and The majority of traders are young supporting cross-border traders will support women (85% of respondents were poverty reduction and higher incomes for female and the average age of a trader is farmers. 32) and experienced traders, with 44% having been traders for more than five To investigate the constraints and conditions that years. cross-borders traders face we implemented a Most of the officials who regulate the survey in mid-2010 at 4 key border crossings in border are men (82%). the Great Lakes region: at Uvira-Bujumbura Most traders sell foodstuffs, particularly (between DRC and Burundi); Bukavu-Cyangugu cereals, pulses, vegetables and fruits. (between DRC and Rwanda); Goma-Gisenyi The quantities involved are small and (DRC and Rwanda) and Kasindi-Mpondwe are typically carried by head. (DRC and Uganda), see Figure 1. Start-up capital is very small (less than $50) and is typically obtained from within the family. Very few traders have received loans from a financial institutional. The vast majority (95%) wishes to invest and grow their business 2 Figure 2: Reported frequency of risks by cross border traders but is constrained from doing so by the current environment at the border and conditions experienced by poor women cross- lack of access to finance. border traders in the Great Lakes region. They For almost two-thirds of the face serious risks and losses each time they cross respondents, income from cross-border the border. Figure 2 summarises the main trade is the main source of income and findings. most (77%) report that household It is striking that payments of bribes is a regular income is heavily dependent on their occurrence for the majority of traders. trading activity. Respondents at all four border posts repeated a Few are members of a traders catch phrase used by officials: "sans argent, on association. ne passe pas" (no money, no passing). At the A crucial fact is that these poor women cross- Goma-Gisenyi border 100% of respondents border traders are undertaking informal reported that they had to pay bribes to cross the activities, in the sense of not being part of a border. A large number of traders also report formal organized economic activity, but not having their goods confiscated and having to pay illegal activities. The majority cross at formal fines. An important feature of border crossings border crossing points and report that they are between the DRC and neighbouring countries in willing to pay appropriate duties and wish to be the Great Lakes region is that large number and treated as business people. A range of officials range of officials at the border; which are present, in principle, to regulate the borders exacerbates the problem of poor governance that they cross. However, many officials hold with negative consequences for cross-border very negative views of poor traders based on traders. Not only are there officials from their social class and often see them as mere customs at the border but also immigration "smugglers." officials, the police, the army and officials implementing health controls. This is Conditions at the border compounded by a lack of transparency and awareness by both traders and officials of the The responses from the detailed interviews and rules and regulations that are supposed to govern focus groups paint a dark picture of the cross-border movements of goods and people. A 3 typical account of every day conditions is who control the borders. At each border provided by an egg and sugar trader from Goma: crossing many officials appear to have "I buy my eggs in Rwanda, as soon as I cross to entrenched negative perceptions of these traders. Congo I give one egg to every official who asks Rude and hostile behavior towards traders is me. Some days I give away more than 30 eggs!" justified and money extorted because they are Reducing the number of agencies and officials at not formalized. But the very poor quality of the the border and increasing the transparency and infrastructure of the border crossing used by predictability of the policy regime is crucial to informal traders is also important in allowing provide an environment in which traders flourish some of the worst types of harassment and and expand their business. violence. Most of the attention of the government and donors has been on improving A large number of traders report being subject to conditions for formal trade and better acts of violence, threats and sexual harassment. infrastructure for trucks at the main border Traders are exposed to beatings, verbal insults, crossings. Informal cross-border traders have not stripping, sexual harassment and even rape. been high on the agenda. The border crossings in Much of this abuse is unreported. While some Goma are a good example. Two crossings are borders are better organized, this gender-based regulated by customs: the "petite barrière", for violence, although more prevalent in the DRC, is small informal traders, and the "grande being perpetrated on both sides of the border in barrière" for more formal traders. The Burundi, Rwanda and Uganda. Not only do differences between the two crossings are officials harass traders but young men, called striking as is the stark contrast between the DRC "les viseurs" (watchers) are hired by state side and the well-organized Rwandan side of the officials and given carte blanche to apply force border. At the "grande barrière" the road is as needed to extract money and goods from paved and buildings are in reasonable state and traders, particularly those that move by foot with cross-border movements appear orderly. At the goods strapped on their backs or carried by head. "petite barrière" (Goma side) it is chaos. Roads A typical occurrence is that women traders are are very poor, and congested with vendors, and a often encircled by a group of men after they number of storefronts tumble onto the busy cross the border. Vulnerability to theft and roadside.4 physical abuse is rampant in these borderlands. Steps to Facilitate Cross-Border Trade in the Thus, cross-border traders face regular losses in Great Lakes Region the form of the almost mandatory payment of bribes and are regularly subject to harassment The immediate priority must be to improve the and physical abuse. This lack of economic and conditions at the border and the treatment of physical security and safety undermines the cross-borders traders. This will have a livelihoods of these traders and compounds their significant impact on the livelihoods of a lack of access to finance, information and substantial number of women and the business knowledge. But it is clear that most households who depend on their income from traders perceive that there is no alternative ­ trading. It will also lead to more cross-border they are stuck in a survival economy. trade and more widely available and cheaper Addressing these issues by providing security at food products. The second imperative is to the border and implementing a transparent and provide and implement a policy framework by predictable regime for those crossing the border which these traders can become increasingly would facilitate trade, improve incomes, organized backed up by support services that contribute to regional food security and in turn improve access to information, facilitate access provide for greater stability in the region. to credit and ensure better representation of traders' interests. This will provide a route by Informal traders, especially poor women food which these activities can gradually become traders, lack representation and organization. As more formalized and distribution channels result, they are vulnerable to powerful officials become more efficient. This will require: 4 1. Officials at all levels recognize the neighboring countries to facilitate trade. The important role played by poor cross-border benefits of joining the COMESA free trade traders. Poor women cross-border traders agreement and enhancing cooperation are currently viewed negatively by policy through the CEPGL should be given careful makers reflecting the misconception that consideration as a means of promoting they are an important source of revenue loss. further integration and simplifying the This is turn means that there has been little taxation of imports from neighbouring effort to improve the condition of the countries. infrastructure at the border crossings they use and a lack of effort to bring discipline The government of the DRC has taken steps and order to the officials who regulate these to address this situation, passing a law borders. The vast majority of these traders stating that only four agencies should be are entrepreneurs who would like to invest present at the border (customs, immigration, and grow their business and emerge from health and hygiene/quality control of goods). their current survival mode if stability and However, while there has been some success security could be provided and policies at in implementation, at many borders more the border were transparent and applied in a than 10 different agencies remain. The predictable and fair manner. These traders customs agency is also developing therefore offer an opportunity rather than a simplified procedures for the border but constraint for growth and poverty reduction. again implementation will need to be carefully monitored. 2. A reduction in the number of agencies at the border and an increase in transparency and 3. Increased professionalism of officials and predictability of the policy regime. There is greater gender awareness. Women are clearly a high degree of uncertainty and under-represented in official bodies at the ambiguity about the legal rules that apply to border and so increasing the number of cross-border trade and how they are applied female border officials is an important step. in practice. Lack of transparency and Nevertheless, lessons show that what is consistency in the application of trade rules needed are gender-aware officials who constrain trade across the borders. The appreciate the issues confronting traders, application of simple and fair procedures poor women and men alike. More women at and reasonable fees would support greater the borders may reduce sexual crimes, but activity and a transition to more organized that is not guaranteed if they do not have and formal modes of exchange. The results power. Lower-level female officials cannot of the survey suggest a number of practical stop higher placed males and their associates steps that could immediately be made: all from carrying out gender-based violence. payments made to an official should be Obvious policies such as only female recorded and an official receipt provided; officers should be allowed to body search payments should be made only at a single, women traders should be made mandatory clearly designated building. Agencies at the and widely publicized. border that can legally charge fees for services that they provide, such as, the There is therefore a need for enhanced agencies responsible for quality and training of officials, including workshops to hygiene, should not be able to levy a charge raise awareness of gender issues, not only at unless a service is provided. In most cases the main formal border crossings but the services of these agencies are not especially at the border crossings used by relevant for small scale traders carrying informal traders. This could provide a base fruits and vegetables. This should be for the introduction of performance supported by a dialogue at the provincial assessments of officials in which treatment and national level on simplification of of cross-border traders is a key indicator. It custom procedures between DRC and is important to educate and not to shame the 5 officials to change behavior, to define a training in basic business practices. It would clear code of practice and reward those also be interesting to further investigate the officials who behave in manner consist with potential beneficial impact of providing higher standards. Experience from warehousing facilities close to the border elsewhere, such as customs reform in and the development of cross-border Senegal, suggests that non-financial markets building on the knowledge of the rewards, such as widespread recognition success of bazaars, for example, in central within the institution and the wider Asia (World Bank (2010)) community through employee of the month schemes, with such awards being kept on the employees file and being a factor in promotion decisions and eligibility for References enhanced training can be as effective as International Alert (2010) "La Traversée: Petit direct financial rewards. This would need to commerce et amélioration des relations be supported but an independent office of transfrontalières entre Goma (RD Congo) and complaints which can record and act upon Gisenyi (Rwanda)," report, June 2010. complaints when violations occur. Integrated Food Security Phase Classification More generally, as in all post-conflict (IPC), July 2009 countries there is a need to address the fundamental issues of governance in public Ugandan Bureau of Statistics and Bank of administration and implement effective Uganda (various). "The Informal Cross Border security sector reform (police, justice and Trade Survey Report." military). The conditions that traders face at the border are in part a consequence of poor World Bank (2010) Skeins of Silk: Borderless wages and often lack of payment and a Bazaars and Border Trade in Central Asia, culture of impunity due to the lack of Washington DC functioning legal and justice system. 4. Improve infrastructure at the border crossings used by informal traders. Both the About the Authors transport infrastructure and the (lack of) Paul Brenton and Shiho Nagaki are from the buildings used by officials need to be World Bank, Celestin Bashinge Bucekuderhwa rehabilitated, including the provision of and Jean-Baptiste Ntagoma are from the basic facilities for officials such as Catholic University of Bukavu, Caroline electricity and water. Work is required to Hossein is an independent consultant This work minimise the risks to safety and security that is funded by the Multi-Donor Trust Fund for arise from the dilapidated infrastructure and Trade and Development supported by the to provide an open and transparent area for governments of the United Kingdom, Finland, officials and traders. Sweden and Norway. The views expressed in this 5. A strategy for integrating poor paper reflect solely those of the authors and not entrepreneurs into the formal economy. First necessarily the views of the funders, the World and foremost is the need to increase the Bank Group or its Executive Directors. representation of these traders through traders associations to ensure that their interests are properly represented in public policy. It is also necessary to address key concerns of these traders regarding their lack of access to finance, lack of information on prices and business opportunities and 6 Notes 1 It is estimated that current agricultural output in the DRC may be less than 50 percent of the level in 1997 (IPC(2009)). Thus there would be a large increase in output just in achieving previous levels of output in addition to the scope to increase productivity and output way beyond this level. 2 A crude comparison of data on formal trade from COMESA's COMSTAT and estimates of informal trade by the Uganda Bureau of Statistics suggests that informal trade in agricultural products may be as much as 5 times higher than recorded trade for the DRCs trade with neighbours in the Great Lakes region. For Rwanda informal trade with the region is estimated to be in the region of 25% of formal trade while it is 55% for Uganda. 3 International Alert (2010) provides information on the border crossing between Goma and Gisenyi and is one of a few studies that have looked at cross- border trade with the DRC. The Government of Rwanda has recently supported a study of informal cross-border trade while the Uganda Bureau of Statistics has for a number of years been surveying informal cross-border exchange. 4 The situation has been transformed on the Rwandan side of the border where significant construction has delivered new customs and immigration buildings, improved roads and street lighting. 7