$4,5m externalised. . . Informal cross-border traders spend millions in imports

A Plumtree flea market trader, Mr Abraham Ndebele (right), sorts out some of the wares he is selling at his stand in the border town in this file photo

A Plumtree flea market trader, Mr Abraham Ndebele (right), sorts out some of the wares he is selling at his stand in the border town in this file photo

Business Reporter
ABOUT $4.5 million is externalised monthly by informal cross-border traders through imports of various goods that are being resold locally, a survey report has shown.

Given low industrial activity in the formal sector and high unemployment in the economy, thousands of people have found solace in informal trading, where they are forced to play hide and seek with authorities in a bid to eke a living.

Despite the liquidity challenges facing the economy, a report that was presented during the Southern Africa Informal Cross Border Traders’ (ICBTs) Conference held in Bulawayo yesterday, indicates the country is losing much foreign exchange through externalisation by different players.

Due to the informal nature of cross border trading, participants drawn from neighbouring Sadc states who attended the indaba said governments were losing substantial potential revenue as a result of failure to harness opportunities in that sector.

They said urgent steps must be taken by authorities to create a supporting institutional and legal framework to protect and promote growth of the informal sector.

“Our research has shown that about $4.5m is spent out of the country monthly through cross border imports. Cross-border traders are involved in externalising funds to procure goods for resale and the same goods impact on the operations of local industries,” said Tatenda Mungumbate, a representative from The Space, an organisation that works closely with cross border traders.

Cross-border traders decried neglect by governments across Sadc, whom they blamed for failure to create jobs, coupled with consequences of neoliberal policies of international finance institutions.

National University of Science and Technology (Nust) researcher, Gracious Mavisa, said informal cross-border trading was on the rise as citizens seek to cushion themselves against economic shocks.

She, however, said informal trade was cumbersome due to rigid regulations and clearance delays, which force many to resort to illegal options. Smuggling and illicit deals are rife in the sector as a result of a support structure from regulatory bodies and governments, participants said.

“There is a need for African governments and policy makers to co-ordinate their strategies to in order to support the needs and increase the understanding of the informal sector,” according to the Open Society Initiative for Southern Africa.

Speaking at the same occasion, Ecumenical Service for Socio-Economic Transformation (ESSET) representative Ms Dawu Sibanda said there was a lack of will by Government towards the informal cross border traders.

“There is a lack of Government will to implement support policies for informal cross border traders. There is a need for policies that are attractive to us so that we can have the capacity to grow,” said Ms Dawu.

Parliamentary Portfolio Committee on Defence, Home Affairs and Security Services chairperson who is also MP for Buhera Central, Mr Ronald Muderedzwa, stressed the need to revise laws to improve lives of the informal cross border traders saying existing legislation was archaic and did not favour the growth of the sector.

Meanwhile, Bulawayo Vendors and Traders’ Association (BVTA) executive director Mr Michael Ndiweni said the purpose of the conference was to find a regional voice to fight the challenges that affect the informal cross border traders especially women.

During the meeting it emerged that female cross border traders were exposed to sexual harassment at border posts and xenophobic attacks in some Sadc countries. The meeting continues today.

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  • Chazunguza

    As much as it is good to protect local Industry, where the Industry is dead/unfunctional, we have to allow vendors to import (for survival).
    Issues of smuggling and illicit dealings have to be countered for the benefit of the Government and Country and the Vendors…
    We can avoid externalisation by reviving Industry and creating Jobs…

    • masvingo zimuto

      The problem is not with the cross border traders who are simply using the opportunity that is there for survival. The problem is with the big fish who are earning foreign currency using the country resources and externalizing the money. The informal system can not be used to sustain the formal system.

  • Wellington

    Fix the economy and everything falls into place, the informal traders are mere victims of the mismanaged system trying to survive