8 March 2014

Ethiopia: Safeguarding Women Traders Across Borders

They are not credited for the contributions they make to their families, to the people they employ or to the governments they pay taxes or fees to. In relation to that, the World Bank Group has published a book entitled Women and Trade in Africa: Realizing the Potential. That being said, women doing business crossing the borders in Africa suffer great risks.

In one account, Paul Brenton, the lead economist at the World Bank and one of the editors of the book said that 85 percent of women crossing borders in four countries of Africa are forced to pay bribes by officials. These women risk sexual harassment, violence and other hostile abuses while trying to support their families. Birhanu Fikade of The Reporter had an opportunity to talk to Paul Brenton about the cross-border traders in Africa. Excerpts: The Reporter: During the recent book launch, the World Bank came out with a cross-border trade issues revolving around women.

How is such a trade problematic in regions like East Africa? Paul Brenton: Women play a very important role in cross-border trade. The evidence we have suggests that they play an important role throughout the continent. Unfortunately, the information we have is very patchy. We lack information about, for example, trade in Ethiopia; particularly with the Sudan and South Sudan where we think women in cross-border trade are going to be very important.

So we know it's an important issue and we do know that there are lots of challenges and poor conditions women traders face when they are going across borders. But also the role they play is very important for their families because the income they get from the activities are very crucial for the welfare of the families. How about to governments? Yes, and to the governments as well and also to employment and job creation. Many of these women could be the larger entrepreneurs of tomorrow. Many businesswomen are repeatedly heard saying that they are facing critical problems when it comes to access to finance. Does the book address issues related to this?

Clearly, access to finance is a challenge for many enterprises. So the context here is access to finance for export enterprises run by women. These are particularly important because they have a big impact on job creation. Export firms tend to be bigger, more productive than firms that just produce for domestic markets. So exports are often the drivers of growth and drivers of job creation. Here we have a group of enterprises that have particular difficulties in getting access to finance simply because they are run by women.

So that is a problem. That is a challenge. Therefore, the country is missing opportunities to generate jobs through the expansion of these enterprises simply because they cannot get access to finance. How is the problem of cross-border trade felt by governments in Africa? First, enough attention is not given to cross-border trade by policymakers. And that means there are lots of practices and behaviors at the border, which tend to limit and constrain the trade rather than facilitate it. If the governments want to give more attention to the issue, they should consider what the rules and regulations that govern trade are to improve the facilities at the border for small traders and provide a route for the traders to become more formal.

They would actually find that they are promoting trade, which generates jobs and would have wider economic benefits. Hence, policymakers need to give more attention to that and recognize its importance. They should look at ways they can simplify the rules and regulations to make it easier for cross-border trade. African heads of state say that they are going to establish regional economic integration. When it comes to trade, you have found out how difficult cross-border trade is for women. How can these two sides be matched? I think it is an important point to make. When African leaders move towards intra-African integration, they cannot ignore issues like this.

So on one hand it's good to talk about big companies being integrated. You have also got to look at the very small traders. At the moment that does not have enough focus, which is one reason for the book, to bring attention to a very important issue. We also need to get more information and do more analyses. So again, governments need to think about how they can get information on this trade and to allow greater analyses of what the challenges and impacts are. They also need to think of practical ways to support traders and make it easier for them to satisfy the rules and regulations and to get their goods across the border. In the book you have come up with issues that government officials are making it very difficult for the traders to do business? In the book you have brought up the fact that government officials are making it very difficult for traders to do business?

I think it is partly because they don't recognize the important role that these traders play both in terms of assisting their families, in which the returns they get from the activities are often crucial for the welfare of their children and might make a difference in getting the children to school or not. But also to the wider economy, they are in the exporting and importing business of goods, which are vital for the local economy, bringing in revenues to the government, a lot of traders are paying taxes and creating jobs for the future.

I think raising visibility is very essential. Policymakers have to think about what they can do to support and encourage that trade. Have you met with government officials to discuss the findings or to know their comments?

Sure, high level officials always recognize that this is important. But translating interactions into reality is the challenge. That is something we try to do. We have a mechanism we call charter for basic rights and obligations for traders to get that enshrined at the border to change behavior. So the officials think of women traders as being entrepreneurs. Their job is to do the important function of regulating borders, collecting revenues, ensuring that smuggling will not take place. But they can also do what they can to facilitate the trade; to make procedures as simple as possible, as clear as possible and as predictable as possible. But that is not the case at the moment.

However, it is important to highlight that the traders cross the border and they know how much they should pay, whom they should pay and if they do that they can move quickly across the border. At the moment there is lot of harassment, a lot of bribery takes place. So it is always uncertain for traders to know what they are going to do with payments and rules at the border. It might be a lot when a finding reveals that 85 percent of cross-border traders face bribes in countries like Rwanda, DRC, Burundi and Uganda.

That is not uncommon. At borders women face lots of harassments. Officials are male and traders are women who are on their own. Infrastructure is not well linked. They are in a very difficult situation. What does the future hold for women traders at the border? Lots of these trading women want to expand their businesses. They want to become bigger traders. They want to contribute more to trade. So, the challenge is how the governments can support them to do that. On the one hand, we have a lot to do about access to finance.

That is a big challenge for all organizations. From the smallest entrepreneurs who are looking for a few dollars right up to the medium-sized enterprises, they are all facing difficulties in getting access to finance. That is a challenge. But what I think the governments can do is to recognize the importance of these traders. What they can do in the short term is to simplify procedures and make sure those procedures are well known by the officials and the traders and that they are applied fairly and equally at the border.

Perhaps they should think about how to monitor that. We have new ways of monitoring that. Most people now have cellphones. So we can get information from traders to know where they are facing harassments and where they happen to pay bribes. Systematically, we will collect that information. I think it is a signal to officials from the highest level that this is important, that these are traders who need to be respected. That would be an important message. What we are doing at the World Bank is to try to provide training to officials to raise their awareness of these issues. We support traders' associations to get more balance in the parallel relations at the border. We also provide the charter of basic rights.

We have been piloting at the borders between Malawi and Zambia and we will be happy to apply that elsewhere too. In Ethiopia, there is an interest in doing that and we certainly are a willing partner if the government wants to do that. Can you cite any account of women's contribution in terms of job creation or to the GDP while doing cross border trade? That is part of the challenge. Most of these traders are in the informal sector. There is no systematic measurement.

What we do know depends on the information from surveys; someone goes to the borders and spends a couple of weeks observing what is going on. What we do know is that when that does happen, this is a very important activity. In many places it is at least tough; maybe the same or up to double the amount of the formal registered trade. The numbers are very large. At one particular border post between Rwanda and DRC, there are more than two thousand traders crossing every day. We know the case is similar in Southern Africa between Zimbabwe and other West African countries as well. But it is a challenge to get that information. Where we have contact with traders, we know how important the trading activities are to their families.

Many of these traders may be women who head households. For the welfare and poverty reduction too it is a crucial activity. In the longer term, these are the potential small, medium sized enterprises of tomorrow that we can have as drivers of job creation. So facilitating their activities is part of the long-run economic development of a country. Do you have any figures that support the benefits of cross-border trade in East Africa, mainly in the Sudan, South Sudan or Ethiopia?

No we don't. We would very much like to. There is information about Uganda. The statistical bureau of Uganda puts lots of efforts into doing surveys on informal trade at their borders. For instance, between the Uganda and South Sudan border they have found that the trade is very important. Hence, we would suspect that the border between Ethiopia and South Sudan again is very important.


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