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    Intra-African trade

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    The creation of a free-trade area that boosts Intra-African trade is being proposed by both the African Union and the World Bank as a key driver for economic growth on the African continent.  The World Bank reports that African nations are losing out on billions of dollars of potential trade earnings because of trade barriers among neighbouring countries and onerous shortcomings rooted in the continent’s history. However, cross-border trade on a micro and informal level has been taking place for decades.  It sustains many livelihoods, creates millions of informal jobs and provides an access point to cheaper and essential goods.

    Low-income transnational migrant workers and crossborder traders, across the continent, are familiar with this informal trade that enables the movement of and the access to cash and goods.  Studies by UNIFEM in 2009, reported that informal cross-border trade in the Southern African Development Community (SADC) was valued at an average of US$ 17.6 billion per year, contributing around 30-40% to intra-SADC trade.  Although hard to quantify, in some economies, it is estimated that informal regional trade flows represent up to 90% of reported trade flows.  These figures highlight the fast growing domestic consumer market across the region and Africa as a whole.

    Whilst governments are planning major infrastructure projects, battling with policy and assessing the synchronization of regulatory and financial trading policies, a South African start-up, moWoza, has been building a mobile trading and shopping platform that will facilitate access to goods for transnational migrants and traders alike.

    Research conducted by moWoza with the Informal Traders Association of Mozambique (Associaçao de Mukheristas), bears similarities with those of West and Central cross-border traders in that traders routinely encounter violence, threats, demands for bribes, and sexual harassment, at the hands of the large numbers of customs and other government officials at the border.  These transgressions are captured in the recently released World Bank video: http://vimeo.com/32976732.  As one egg and sugar trader from Goma says on the video: “I buy my eggs in Rwanda; as soon as I cross to Congo I give one egg to every official who asks me. Some days I give away more than 30 eggs!”

    The President of the Associaçao of Mukherista in Mozambique, Sudekar Novela, agrees that the hazards encountered by these traders is only one category of factors experienced within this sector.  Border procedures and official professionalism, export duties and taxes, currency exchange, wholesale retail and receipting, travel and accommodation are all factors along the value chain which need to be addressed and normalised. 

     A study conducted by UNIFEM Director for Southern Africa in 2010, Nomcebo Manzini noted that a recent survey of more than 700 informal cross-border traders in the region shows that trade contributes significantly to the number-one Millennium Goal:  alleviating poverty. “Sub-Saharan Africa is probably going to be one of those regions of the world where poverty, instead of going down, is actually going to escalate.  Both Manzine and Novela state that more needs to be done to assist the traders, as a way of ensuring that poverty is reduced in the region. Novela believes that moWoza will significantly benefit the welfare of crossborder traders as they introduce novel ways of facilitating mobile payments, and through their partnership led model simplify product ordering while reducing the amount of time that these traders spend travelling to access the goods.  

    Six hundred kilometres west of Maputo, Mozambique, a small vulnerable community of Mozambican migrant workers living on the outskirts of Pretoria, South Africa spoke of their difficulties sending goods back to their dependants in Mozambique.  Most make a substandard living in South Africa, working as farm labourers, domestic workers or street hawkers while saving modest amounts to send back to their families in the form of stable food products.  They rely on long distance bus drivers and informal carriers who they pay ‘hawala’ to transport the goods back to their families in Mozambique.  These long distant intermediaries in turn have no formal pricing structures, export licenses or insurance for transporting goods between countries and are subject to having the goods confiscated en-route or at the borders, leaving the migrant and beneficiaries without the goods.

    With urbanization and transnational migration increasing, it is envisaged that more families will be supported by family members at a distance.  With many migrants perceiving remittances as too costly, and without the relevant identity documentation mobile transfers are not an option.  By using moWoza, registered users can order and send goods via an SMS. Scratch cards, purchased from vendors will facilitate payment.  The beneficiaries are notified via an SMS each time a parcel is remitted and they can pick these up from a merchant in the area where they live.

    Whilst the African Union calls for a free trade area by 2017, moWoza will effectively be formalizing trade for crossborder traders and transnational African migrants by an extensive partnership led supply chain that will engage with SME entrepreneurs, agents, merchants and distribution networks.  While the service initially only offers staple food products, it will extend to include hygienic products, cosmetics, jewellery and electronic appliances.  The moWoza marketplace gives Africans a virtual doorway to accessibility, affordability and convenience.  This augmentation of virtual and physical will allow people in villages to participate in international trade.