Types of informal goods

The ECOWAS data base uses the Harmonized System of Classification (HSC) to codify regionally traded goods based on their import value. The LARES data base details cross-border trade among Nigeria and neighbouring countries. Merging the two systems permits classification into five main categories: unprocessed products, artisanal products, re-exported products, pharmaceutical products and all other non-classified products. Lists of products traded on informal circuits are purely indicative, since they vary from country to country. The underlying assumption is that unprocessed products are excluded from official export channels by the state or trading companies because of their sectors’ weaknesses or lack of organization. The lists also include products traded in organized sectors on the grounds that they may also appear on informal circuits simply because, in certain countries, there are paral-lel distribution channels to export these goods under the radar of state controls.

In the West African trading zones (Nigeria, Benin, Niger, Cameroon and Chad) such goods are cotton fiber, cement, vegetable oils, petroleum products, fertilizers and pesticides. Using a basic-needs approach to categorize goods traded informally among Ethiopia and neighbouring countries (Djibouti, Somali and Kenya), prod-ucts identified are veterinary drugs, livestock, milk and dairy prodprod-ucts, chickens and eggs, local fish, coffee, grains, beans, shoes, clothing, manufactured and electronic goods and chat. Whether the categories are based on cross-border trade, domestic markets or consumption requirements, African countries should closely review

natu-ral resource-based products—the continent’s most-traded products because of the little processing they require—since growth will stem primarily from the domestic processing and intra-African trade of these products.

Informal trade for re-export often differs from other informal activities in magnitude and in the more sophisticated structure of this trade, highly organized in finance, operation, transport, storage and information networks. These are no longer essen-tial commodities but goods for consumption, destined to be sold far from the border areas in central national markets such as Addis Ababa, Nairobi, Djibouti, Berbera and Mogadishu, and even for re-export to the Middle East (products such as live-stock) and to Ethiopia (electronic goods, packed-good items and rice, used and new clothing, shoes, spare parts, drugs and manufactured goods imported from Asia).

Examining cross-border import-export flows and domestic flow, using the interna-tional HSC of products for a more detailed definition (computation up to six digits for simplification), and drawing on field observations in both West and Eastern Africa, permits a schematic classification into three main categories:

Products of agricultural provenance, fisheries and domestic livestock;

1.

Domestic handicrafts;

2. ¹ and

Cross-border imports of manufactured products and those imported and 3. re- exported without value added, on parallel circuits.

5.3.1 Unprocessed products

This category includes most primary commodities except for agricultural seed and selected livestock breeds, imported or developed in research laboratories. Cereals, roots and tubers, oil-seed, leguminous seed, livestock and fisheries come under the category of informal trade in unprocessed products. Informal trade in goods derived from unprocessed products occurs in all trade sectors. However, there are variations in scale, depending on the sector and country. For example, a total of 156 products defined under HS 6 in the detailed list extracted from the database were identified in the category of unprocessed products from field observations. Annex 5.1 summa-rizes these products. Products may be classified in this table only because of the four-digit limitation, and they may not all necessarily fall under informal trade. Thus, under HS 0206, designating edible animal offal from cows, goats, sheep, pigs, horses and donkeys, there are three sub-products: HS 020610 (fresh or chilled edible offal of bovine animals); HS 020630 (fresh or chilled edible offal of swine); HS 020680 (fresh or chilled edible offal of sheep, goats, horses, asses, mules and hinnies) traded informally, out of the nine sub-products in this category.

1 The first two categories are theoretically exempted from customs duties in the trade liberaliza-tion schemes both inside domestic borders as well as for intra-community trade in WAMU and ECOWAS.

5.3.2 Artisanal products

A large, highly diversified number of artisanal products are traded informally throughout the continent. They are mainly of African origin, with provenance from many parts of the continent. The dominant products are worked in animal skin, par-ticularly domesticated cattle, sheep and goats, camel and wild animals (lion, panther, antelope, snakes, reptiles, crocodile, boa and viper); masks and statues of vegetal origin; trunks of wood and stone; necklaces; lithographs; wicker products (furni-ture, baskets, bins.); clothing made of traditional cloth; toys and ornaments made of waste materials (plastics, fibers, scrap iron, aluminium); etchings, batiks, suitcases, handbags, cooking utensils in scrap aluminium.

In addition to artisanal products some products used for handicrafts could be clas-sified as primary products or under other classifications, because they are primarily used for artisanal work and the potential development of this sector is linked to that of handicrafts. Among these products under Chapter 14 of the HS classification are bamboo, reeds and cereal chaff. Annex 5.2 shows the groups of products that make up the artisanal objects in informal trade flows. Ninety-six products are identified in this category. They are traded primarily for local use but can be found at border markets and are destined for cross-border flows.

Large quantities of these artisanal products circulate among urban centres. However, occasional markets from the more remote areas and rural markets are also centres for artisanal tools for hunting and farming: hoes, cutlasses, ploughs, rakes, axes, rope, baskets, pottery and traps, among other products. Apart from these products and furniture, products identified from the HSC are primarily artwork from diverse origins: masks, statues, necklaces in stone and leather and etchings. Nigeria, Ghana, Côte d’Ivoire and, secondarily, Burkina Faso and Benin, are large suppliers of such art objects. In addition, for some countries like Benin, there are articles made out of scrap: plastic bags recycled as handbags, key chains, wallets, and decorative articles women’s organizations have made both to fight urban poverty and promote a cleaner environment.

5.3.3 Products for re-export

These products originate mainly from outside the continent. Their share of cross-border trade is directly proportional to the size of the national economies and the protectionist or liberal nature of trade policies. They consist mainly of products for daily use and basic consumption: fabrics, second-hand clothing or automobiles, tyres, foodstuffs and tobacco products. Annex 5.3 contains a partial description of these products (four-digit level, HS 4), for which a complete list can be found in the ECOWAS data base. In that data base are located about 327 tariff headings, from

vehicles to cereals (rice, wheat flour), including meats, alcoholic drinks, tobacco, fabrics and second-hand clothing.

5.3.4 Pharmaceutical products

Various pharmaceutical products, most of dubious origin, are traded informally in Africa. In West Africa, the most common are antibiotics, analgesics and increas-ingly, sedatives. It is difficult to select precise classifications from the HS, and they are grouped together under Chapter 30, particularly under HS 2935 and HS 3000.

Annex 5.4 includes a list of some of these products.