Conclusions and recommendations

African informal trade, irrespective of the region concerned, cannot continue to be perceived by the national and community institutions of ECOWAS, WAMU and COMESA, with particular reference to the economic and trade policies as defined by North (1990), as structural anomalies that hinder growth and weaken modern economies.

Whether it be cross-border or domestic, informal trade remains the mode of trade best suited, from the social efficiency perspective, to the distribution of goods to meet the diversity of the African consumer’s demand. Despite its limits, informal trade overcomes the landlocked nature of economies and inadequate communications infrastructure; its gaps in the supply of public goods; contradictions in national and community rules and regulations; multiple economic crises; and the consequences of fratricidal wars, in order to supply the continent’s diverse populations.

Can the present systems of basic commodity distribution to the most remote ham-lets and along African borders function without informal trade? Seen from this per-spective, the informal sector should not be considered as a virus attacking formal economic activity; rather, it forms a continuum unhampered by strict constraints, a response to formal trade’s shortcomings. It breathes life into official trade, even if it sometimes benefits from unfair competition. It is a classic expression of the type

of socialization of exchange where accounting rules and the financial cost/benefit ratios do not always apply. And as a result, it succeeds in using resources somewhat inefficiently but satisfactorily.

Therefore, throughout Africa, the informal sector ensures the largest share of the col-lection and distribution of goods through the channels that traverse the continent in a dense network. This is the basis for the regional development of national territories and adds value to unprocessed products. Contrary to received wisdom, over the past few years West Africa shows real progress in agricultural production, which may be developed far faster than the population growth trends estimated at between 455 and 485 million inhabitants by 2030.

It has been demonstrated in the case study from the Horn of Africa and Ethiopia, in particular, how the operators of ICBT in East Africa, often unregistered and considered illegal, from the small importers and exporters of basic commodities to the big operators from central national markets contribute to food security and the stabilization of food prices, especially in times of fluctuating weather conditions.

These operators face complex problems, including:

The risk of having their goods and foreign currencies confiscated, if caught;

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Harassment by custom officials;

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Road blocks and lengthy delays unloading and loading goods;

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Long customs delays;

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Sexual harassment or searches;

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No accommodation;

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Forced payment of bribes to customs and border officers;

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No bank credit;

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Security risks from robbers and bandits, and the frequent conflicts and

• border closures; and

The risk of animal diseases and livestock export bans.

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In addition to these problems, unfavourable trade balances and unfair trade practices cause the neighbouring countries to be unwilling to cooperate and coordinate ICBT in the Horn of Africa.

Genuine ICBT operators are mostly small-scale enterprises or individuals. They are generally willing to be registered to operate cross-border trade through paying reasonable duties and taxes. However, they must often compete on unfavourable terms against the large-scale operators of ICBT, whose main objectives are to ille-gally export goods and livestock in large quantities and thus earn foreign exchange with which they can smuggle goods without paying duties and taxes. Policies and

administrative measures being implemented to control and stop illegal cross-border trade are less effective when it comes to the big operators, but seriously hurt genuine small-scale operators and deprive border communities of their livelihoods.

The common agricultural policies of WAMU, ECOWAS and COMESA, to men-tion but three RECs, possess instruments to improve supply. To reach the objectives stated in these policies, and those linked to the growth of regional and intra-African growth in particular, the following measures must be taken:

Customs duties and taxes on essential commodities must be lowered, and

• tariff and non-tariff barriers must be reduced through improved fiscal col-lection. This includes the collection of local development taxes, collection at road blocks, the confiscation of property and the harassment of cross-border traders, particularly women.

Administrative and registration procedures must be improved, including

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providing licenses to genuine small-scale operators of cross-border trade.

This includes disseminating the rules and regulations to border custom offi-cials and operators. More effectively implementing economic community regulations on custom procedures would permit the eventual elimination of certain custom duties and taxes, as stipulated in the agreements.

Value should be added to products though technical improvements and

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funding the value chain for high-potential products. Regular revisions and increased flexibility regarding lists of goods to be traded and liberalizing distances permitted for cross-border trade to be determined by economic factors rather than by administrative rules would enable traders to respond more rapidly to changing circumstances.

Governance must be improved through adequate remuneration and strict

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disciplinary measures to reduce corruption of custom officers, local admin-istrators and militia. Special attention should be paid to large operators of ICBT who often reside in capital cities and conduct such activities through local agents, brokers and partners. Random raids in the past have not proved successful, as corrupt officials have been able to quickly recoup their opera-tion. New policies must include campaigns to increase awareness, provide incentives and involve them in future development prospects along with political and administrative commitments designed to stamp out illegal operators.

Support for trade, notably communications infrastructure and storage

facil-• ities, must be improved. Infrastructure should be available for cross-border trade at key crossing points. This includes roads and transport facilities, holding grounds for livestock, communication on markets, storage and border posts. Banks at border areas should give loans, credit and foreign-exchange transaction services to cross-border traders.

Professional and inter-professional organizations of the product value

• chains, public technical trade services, locally-elected officials, NGOs and public security services, including police and customs, should be involved in the agricultural, commercial and industrial policy processes.

Trade flows should be monitored including the issue of cross-border trade,

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and added to the agenda in quarterly, semi-annual and annual bilateral meetings among countries. For example, there are regular bilateral meetings between Ethiopia and the Sudan, Ethiopia and Djibouti and Ethiopia and Kenya, but their agendas tend to be dominated by security issues rather than border trade, according to key informants. Attendance at such meetings should also include local border administrators and custom officials.

Social and economic development should be promoted, particularly in

• remote and isolated border areas, and the distribution and marketing of locally produced goods to border areas facilitated to enable them compete at border areas.

In addition, certain research ideas must be explored in the area of developing intra-regional and intra-African trade to design more aggressive, functional policies than the present ones. Five such areas for research are the role of globalization in structur-ing informal African trade; the potential effects on informal trade of implementstructur-ing a customs union; assessing the true impact of advocacy on increasing intra-community trade flows; evaluating the contribution of cross-border informal trade to improving the conditions of women, and, finally, since no enterprise or informal activity func-tions in isolation, assessing links between informal trade and formal businesses.