GICA RESOURCE LIBRARY
Improving Behavior at Borders to Promote Trade Formalization : the Charter for Cross-Border Traders
Informal trade supports the livelihood of hundreds of thousands of households in Africa, reaches markets and clients that are underserved by formal channels, and contributes to regional food security. Despite numerous benefits, conducting cross-border transactions remains expensive for small traders in Africa. For example, small traders in Malawi and Zambia pay 62 percent more in per unit terms for border costs than large formal traders. While there are systems in place to facilitate cross-border trade such as the current Simplified Trade Regime (STR) that eases certain customs processes, a host of registration and other requirements remain in place and increase small traders' costs to uncompetitive levels. This note presents an overview of key challenges faced by small traders across Africa, and proposes the charter for cross-border traders as a potential solution to address them. Special attention is given to the case of Malawi and Zambia, where the Charter is currently being piloted by the World Bank in collaboration with the respective Governments, Traders' Associations, and border officials as part of the first joint policy action emerging from the Diagnostics Trade Integration Studies (DTIS) carried out in the two countries.
Brenton, Paul; Dihel, Nora; Hoppe, Mombert; Soprano, Carmine. 2014. Improving behavior at borders to promote trade formalization : the charter for cross-border traders. Africa trade policy notes ; no. 41. Washington, DC ; World Bank Group. http://documents.worldbank.org/curated/en/894601468346146304/Improving-behavior-at-borders-to-promote-trade-formalization-the-ch...