Cross border trade critical in achieving regional integration
Published On November 9, 2022 » 2424 Views» By Times Reporter » Business, Columns
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AS COVID-19 continues wreaking havoc to nations, a strengthened regional integration is critical in keeping fragile economies running.
From time immemorial, cross-border trade, especially at small scale levels has been showing significant potential in promoting regional trade.
Various studies have shown that regional trade at small scale level has the capacity to contribute to poverty reduction and boost food security across Africa if well supported by all meaningful stakeholders.
Supporting small scale border trading can open up most economic sectors and ensure that they deliver to their full development potential.
In Zambia cross border trade has for a long time now been identified as a catalyst for economic development as it contributes to foreign exchange earnings.
Zambia is one of the landlocked countries that has benefited from international cross border trading with its neighbouring countries like Zimbabwe, Malawi, Angola, Botswana, Mozambique and the Democratic Republic of Congo(DRC) among others.
It has been observed that most of the cross border trade in Zambia happens at Kasumbalesa, a border shared with DRC, and where traders from different parts of the two countries cross regularly to sell their products.
Today, cross border trade is a major feature of African economic and social landscapes.
It is estimated that small-scale cross border trade contributes to the income of about 43 per cent of Africa’s entire population.
Small scale cross border trade has helped to support livelihoods and creates employment for disadvantaged and marginalized groups.
Between Zambian and DRC, cross border trade is mainly dominated by agricultural and livestock products as they are an essential part of food security.
Mealie meal, goats, vegetables, fruits, maize, beverages, maize stock feed and other agriculture, livestock products are traded between Zambia and DRC in Kasumbalesa and Bilanga areas respectively.
Small scale cross border trading is mainly dominated by women consisting about 70 per cent.
However, small scale cross border traders have been facing historical challenges among limited financing, poor-quality inputs, low capacity and lack of machinery.
Other challenges include poor border infrastructure, inefficient marketing and distribution channels, among others.
Most, if not all the cross border traders are not registered as formal business owners; they do not operate with the specific goal of circumventing existing laws, applicable taxes, and relevant procedures.
They pass through official crossing points and even undergo formal clearance procedures, yet their consignments are often so small that they escape official records.
They lack education, skills and training and also have limited access to technology and use poor infrastructure.
In order to address these challenges and ensure that the cross border trading reaches its full potential, Common Market for Eastern and Southern Africa (COMESA) is implementing the Cross Border Trade Initiative, a programme financed by the European Union under the 11th European Development Fund (EDF).
The aim of this Euro 15 Million programme is to facilitate small scale cross border trade among the targeted countries through effective policy and governance reforms, institutional capacity building, improved border infrastructures and better data collection and monitoring.
It has been noted that small-scale cross-border traders are benefitting from the preferential trading arrangements created by the Regional Economic Communities.
Hence, way back in the late 1990s, at the request of small scale cross border traders, COMESA developed the idea of a Simplified Trade Regime (STR)for small scale cross border traders.
The STR was launched in 2010 in a number of COMESA member States and has enabled the small scale cross border traders to benefit from the COMESA preferential tariff treatment.
DRC was among the pilot countries for STR implementation in 2010, even though it has not yet been implemented at Kasumbalesa.

. Kapwepwe

Zambia was also among the pilot countries and has implemented STR with Malawi and Zimbabwe.
COMESA general secretary Chileshe Kapwepwe says STR between Zambia DRC will enable small scale cross border traders like the large scale enjoy the benefits of a duty and quota free entry of their goods.
Ms Kapwepwe says STR should be operational at all common border posts in the region.
She adds that the cost of doing business for cross-border traders is high as a result of, among others, use of informal channels to conduct trade and lack of facilities and systems at border posts supporting such trade.
Ms Kapwepwe says studies and analyses have shown that the majority of cross border traders are women and youths which comprise over 70 per cent.
“Simplifying and formalizing cross border trade will help empower these otherwise marginalized population groups and make it easier for them to conduct business, earn incomes and also improve their livelihoods and those of their families,” she says COMESA views STR as an instrument to help governments empower women and youths.
However, there are allegations that some cross border traders are abused by border officials and call for fair treatment with dignity while ensuring the correct amount of revenue due from the traders to the State is collected.
Ms Kapwepwe advises the small-scale cross border traders to familiarize themselves with their rights and obligations at the border.
Copperbelt permanent secretary Augustine Kasongo says it is important to explore ways in enhancing trade between Zambia and DRC through the facilitation of the STR.
Mr Kasongo notes that informal trade is taking place next to formal trade in border areas.
And recently, Zambia and DRC held a bilateral meeting on the establishment of the STR at the Kasumbalesa border post in Chililabombwe.
DRC delegation leader Jeremie Mukena says the STR will help facilitate trade for small traders mostly women who will benefit from the preferential tariffs of customs duty and rates.
Mr Mukena explains that an organized trade between the two countries will effectively contribute to economic growth and create jobs for the locals.
Commerce Trade and Industry minister Chipoka Mulenga adds that it is Zambia’s wish to enhance trade opportunities with DRC especially in key economic sectors.
President Hakainde Hichilema and DRC president Felix Tshisekedi are in the process of signing trade protection agreements to boost ties between the two countries.

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