Posts Tagged ‘east african community’

A Comprehensive Analysis of the Literature on Informal Cross Border Trade in East Africa

Download the comprehensive literature review (PDF) on informal cross border trade, in the context of the informal economy of the East African Community, the Democratic Republic of Congo, and South Sudan. This paper was supported by TradeMark East Africa during the period November 2015 to January 2016. A short extract from the preamble is given below:


For trade to be truly inclusive and sustainable, it must embrace the informal economy rather than excluding it. When John Keith Hart first coined the termi in the early 1970s, he did not distinguish between the illicit and licit aspects of the informal trade he observed all around him on the streets of Accra. In the decades since, this conflation has created more challenges than necessary, throwing up barriers where there were none.

As Kanbur and Keen suggestii, unpacking the basic concept of the “informal sector” and describing the various segments will lead to far greater returns on the resources invested and improve the outcomes and impact of the policies and programmes designed for each.

“Informal trade” across Eastern Africa can best be described as a web of interlinked networksiii serving to connect peoples and products across the region. Held together byiv trust, kinship and community relationships, it has been seen to be resilient, and persistent. Robust enough to survive natural disasters and manmade upheavals of the decades past, it is flexible, nimble, and responsive to patterns of abundance and scarcityv.

i Hart, K (1973), “Informal income opportunities and urban employment in Ghana”, The journal of modern African studies 11 (01), 61-89

ii Kanbur, R and M Keen (2015), “Rethinking Informality”, http://www.voxeu.org/article/rethinking-informality

iii Walther, O. (2015), “Social Network Analysis and Informal Trade”, Working paper for the World Bank

iv Hart, K (2000), “Kinship, contract, and trust: The economic organization of migrants in an African city slum”, Trust: Making and breaking cooperative relations, 176-193

v Bhan, N. (2009), “Understanding BoP household financial management through exploratory design research in rural Philippines and India”, iBoP Asia and IDRC

The East African Community is a hidden gem

eac-locator-mapEven as headlines shriek about “Africa”s economy undergoing some form of turmoil or the other, increasingly, indepth focused reports point out that the East African Community is performing exceedingly well. “Africa”, it turns out, is a vast and diverse continent made up of more than 50 countries. The IMF said:

…the multi-speed growth in the 1.4 % regional aggregate growth this year over-shadowed the prevailing diversity across the region. Almost half of the 45 countries in the region (south of the Sahara), including Côte d’Ivoire, Ethiopia, Senegal, and Tanzania, he noted, would continue to enjoy robust growth, with economic output set to expand by 6 per cent or more by this year…

while the World Bank chimed in with:

…the region’s economic performance in 2017 will continue to be marked by variation across countries.

eac-gdpIt was when UNCTAD’s Mukhisa Kituyi pointed out that in East Africa, intra-regional trade is closer to 26% – double the figure generally touted for the continent’s performance, that it struck me how much the current approach to considering metrics for the continent hid so much of the value. Either the entire continent is taken as a whole, or as “sub Saharan Africa” including South Africa. Once I’ve seen the use of SSAXSA – those parts of the continent that aren’t North or South. Perhaps its time to disaggregate our assessments even further?

While this post isn’t meant to be a comprehensive literature review, so much as an evidence based request for more focused and granular analysis of the opportunity spaces on the African continent, here’s a variety of areas where the EAC countries tend to rank in the top 10. Note that they’re all from different sources as well.

tablendungu_chart2
logistics-secondFood for thought, isn’t it? In subsequent posts, I’ll be taking a closer look at the EAC as an attractive opportunity space for new market strategies and business development.