ECONOMIC JUSTICE NETWORK. Informal Cross-Border Trade in SADC

Transcription

1 ECONOMIC JUSTICE NETWORK Infrmal Crss-Brder Trade in SADC Cnsultatin and Planning Wrkshp Tuesday-Wednesday, 4-5 Nvember 2008 Crssrad Htel, Lilngwe, Malawi Prepared by: Umnth Wamazwe (PTY) Ltd Creating and Sharing Wealth

2 Cntents 1. Executive Summary Wrkshp Overview Reginal Organisatin, Cmmitment and Next Steps Backgrund and Cntext Backgrund Infrmal Crss-Brder Trading in SADC Challenges n the Infrmal Crss-Brder Trade Sectr The Reginal Plicy Instruments Dealing with Infrmal Trade Suthern Africa Trust, Ecnmic Justice Netwrk backgrund t this wrkshp Objectives f the Wrkshp Expected utcmes f the wrkshp Wrkshp Purpse and Objectives Purpse Objectives Day Key Pints and Cnclusins, Day The State f the ICBT Sectr in the SADC regin Cuntry Presentatins Malawi The Demcratic Republic f Cng Zimbabwe Mzambique Suth Africa Zambia Putting it all tgether: Day Key Pints and Cnclusins, Day Prpsals and Recmmendatins t the SADC Secretariat Prpsals and Recmmendatins t the Natinal Gvernments Prpsals and Recmmendatins t the Natinal ICBT Assciatins Prpsals and Recmmendatins n Reginal ICBT Integratin Interim Steering Cmmittee fr Reginal ICBT Netwrk: Actin Planning Cnclusin and Next Steps Cmmitment Next Steps... Errr! Bkmark nt defined. Annexes Annexure A: Challenges and Opprtunities f ICBTs in the Regin Annexure B: The Malawi Declaratin, 5 Nvember Annexure C: Radmap Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 2 f 30

3 1. Executive Summary 1.1. Wrkshp Overview Effective crss-brder trading fr small t medium traders in the SADC regin requires a well planned and crdinated effrt amng an array f rganizatins, disciplines, and sectrs. This is very critical cnsidering the fact that crss brder trade spurs and catapults many small scale entrepreneurs t eschew pverty and creates emplyment pprtunities fr a number f peple. Research has als shwn that, traders emply peple (mstly wmen) in their hme cuntries and in the cuntries where they trade (SARDC Research paper 2008). ICBT cnsists f a diverse grup dminated by wmen and generally cmprising the vulnerable, unemplyed, rphans, refugees, the yuth, schl leavers and widws. This wrkshp enhanced planning and crdinatin f the sectr by bringing tgether rganised and nn-rganised Infrmal Crss-Brder Traders (ICBTs) frm cuntries in the Suthern African Develpment Cmmunity (SADC) regin t identify key issues that hinders the grwth ptential f this sectr and begin mapping next steps t increase their cllabratin in addressing challenges faced by this imprtant yet marginalised sectr. The tw day participatry wrkshp cmbined key nte addresses, infrmatin sharing and planning. The Suthern Africa Trust in cnjunctin with the Ecnmic Justice Netwrk initiated this wrkshp in rder t build infrmal crss-brder trader s shared understanding f the challenges faced by this sectr and t develp a radmap f strategies t address these challenges. In additin t develping the radmap, the wrkshp created a platfrm fr the ICBTs t discuss brader crdinatin and cllabratin issues. Day One was targeted at understanding the state f infrmal crss-brder trading and its rle in ecnmic grwth, emplyment creatin and pverty alleviatin in the SADC regin. Outcmes f Day One included: Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 3 f 30

4 Brader understanding f each cuntry s ICBT wrk and shared challenges. Identificatin f pprtunities f the ICBT sectr in the regin. In Day Tw f the wrkshp participants identified strengths, weaknesses, challenges, and pprtunities fr strengthening, prmting and prtecting the ICBT sectr at bth cuntry and reginal levels. Day Tw utcmes included: Prpsals and recmmendatins t natinal gvernments, the SADC secretariat, private sectr and lcal ICBT rganisatins n hw t imprve the plight f the ICBT sectr and thereby created an enabled envirnment fr the sectr t perate effectively; Renewed interest in crdinatin and cllabratin at cuntry and reginal levels Cncrete cuntry actin plans t strengthen prtectin f the sectr thrugh crdinatin and cllabratin with each ther Cmmitments frm individual participants in a frm f declaratin fr cncrete actin within their ICBT assciatins and prgrammes t strengthen actin t address ICBT challenges using a multi-sectral and intergvernmental apprach. Participants wrked tgether, discussing and explring this extremely challenging prgramme area. With a spirit f cllabratin, participants agreed that this wrk is indeed challenging, but can be addressed when they wrk tgether Reginal Organisatin, Cmmitment and Next Steps At the clsing f the wrkshp, participants agreed t be respnsible fr carrying frward messages frm this wrkshp and appinted an interim steering cmmittee that wuld ensure the develpment f the reginal ICBT strategy and implementatin f the radmap. Zimbabwe was identified as the hst cuntry fr the Interim Steering Cmmittee supprted by Zambia and Malawi. Key messages t be carried frward include: Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 4 f 30

5 ICBT is an imprtant ecnmic sectr in the SADC regin given it s central rle in pverty alleviatin, emplyment creatin and ecnmic grwth Well crdinated, integrated multi-sectral, inter-assciatin actin is needed Plicy and accuntability supprt is needed frm the highest levels f cuntry gvernments and the SADC Secretariat Cllabratin with the private sectr is essential Prvide training and apprpriate, cmpassinate services t ICBTs Implement realistic strategies addressing shrt-term situatinal factrs and lngterm sustainability f the ICBT sectr In additin, participants will cntinue building alliances and netwrks, strengthening crdinatin, and increasing cmmunicatin amng participants and their ICBT assciatins, and include ther cuntries that were nt present at this wrkshp. This includes taking steps t frmalise ICBT assciatin in cuntries where they are nt existence and t increase attentin t the issues and strengthen ICBTs wrk t address their plight. There shuld be cnsistent fllw up cmmunicatins and meetings at the natinal and reginal levels. Participants will nw increase their cllabratin and crdinatin. Subsequent meetings shuld include review, revisin, and refinement f crdinated actin plans. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 5 f 30

6 2. Backgrund and Cntext 2.1. Backgrund Infrmal Crss-Brder Trading in SADC The Suthern Africa Trust (SAT) and the Ecnmic Justice Netwrk (EJN) cmmissined different research studies n the Infrmal Crss Brder Trade (ICBT) in the regin. These studies were necessitated and influenced by the enrmus grwth and significance f the sectr. Suffice t say, all f these studies came t a cnclusin that infrmal crss brder trade cntributes immensely t the ecnmies f many SADC cuntries in varius ways. Crss brder trade spurs and catapults many small scale entrepreneurs t eschew pverty and creating emplyment pprtunities fr a number f peple as ften traders emply peple (mstly wmen) in their hme cuntries and in the cuntries where they trade (SARDC Research paper 2008). ICBT cnsists f a diverse grup dminated by wmen and generally cmprising the vulnerable, unemplyed, rphans, refugees, the yuth, schl leavers and widws. Accrding t the studies the level f ICBT in Suthern Africa remains high and many peple are making a decent living ut f this frm f business. Fr many citizens f the Suthern Africa Develpment Cmmunity (SADC), ICBT has becme a prfitable enterprise t the extent that sme f them have dared t leave frmal emplyment t cncentrate n infrmal crss brder trade. Despite the lack f data, sme estimates have put ICBT at between 30 t 40 percent f intra-sadc trade, suggesting that by ignring infrmal crss brder trade, SADC member states culd be verlking a significant prprtin f their trade (SARDC Research Paper 2008). Infrmal crss barder trade culd be defined as cnsisting f easily bservable gds that are traded acrss cuntries either by aviding custms pints r passing thrugh the custms pints but with intentinally undervalued declaratins. Sme f the findings f the research studies are: Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 6 f 30

7 The lack f recgnitin f ICBT is evident, despite the fact that natinal and reginal plicy initiatives, in particular the SADC Trade Prtcl, prtray intrareginal trade as an imprtant way f spurring ecnmic develpment and pverty reductin. ICBT cntributes significantly t the well being f citizens and if deliberate steps are taken t create an enabling plicy and regulatry envirnment, the sectr can have a psitive impact twards the attainment f Millennium Develpment Gals (MDGs). ICBT has cntributed significantly twards emplyment, creatin and incme generatin especially fr peple wh are unable t find frmal emplyment due t varius scial and ecnmic reasns and als thse wh have been retrenched frm frmal emplyment. The reginal average mnthly value f gds traded was fund t be as high as US$2,500 per persn while sme traders cnfirmed that they lived n mre than US$1 a day which wuld nt happen if they relied n frmal emplyment incme alne. ICBT plays an imprtant rle in ensuring fd security by mving agricultural prduce and ther fdstuffs frm where they are in surplus t where there is a deficit. ICBT als plays a cmplementary rle t establish businesses by supplying gds in shrt supply as well as pening new markets. On average ver 70% f infrmal crss brder traders are female wh culd either be widwed, divrced r wh simply undertake this business t supplement their spuses incmes Challenges n the Infrmal Crss-Brder Trade Sectr Sme f the challenges depicted by the studies include: Drug trafficking and smuggling f precius minerals such as gld and diamnd; Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 7 f 30

8 Custms and tax evasin which deprives gvernment f ptential revenue; Illegal currency trading; Inability t meet certain health, sanitary and envirnmental requirements; Instability f families ften due t lng absence frm hme by either spuse; Difficulties in btaining passprts and visas; Refusal f entry in cuntries that may nt require visas; Excessive custms charges; Unwarranted impunding f gds; Humiliating bdy searches; Limited access t frmal credit schemes; Lack f reliable transprt; Weak assciatins; Unfavurable plicy and regulatry envirnment The Reginal Plicy Instruments Dealing with Infrmal Trade At the reginal level, there are sme plicy instruments and prtcls that deal with infrmal trade sectr. In 1996 the SADC adpted a Prtcl n Trade which addresses issues f relevance fr infrmal traders such as transprt issues and transprting and strage requirements pertaining t certain gds; exemptins frm custms; custms legislatin; imprt and exprt restrictins; and cmpetitin. The prtcl further cmmits SADC Member States t raise awareness amngst their citizenry regarding the imprtance f trade t ecnmic develpment; t facilitate the strengthening f internal capacities t undertake trade effectively; strengthen natinal and reginal infrastructure; invlve the private sectr in plicy develpment, encurage SME participatin; raise awareness f trade and t harmnise laws and practice, as well as simplify and harmnise custms prcedures (EJN Research Paper 2008). Anther relevant and imprtant reginal instrument is the Suthern African Develpment Cmmunity Reginal Indicative Strategic Develpment Plan (RISDP). The Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 8 f 30

9 RISDP articulates that in develping plicies fr industrial and mining develpment, the questin f the infrmal sectr bth in terms f trade liberalisatin and actual prductin shuld be taken n bard. These instruments are imprtant and helpful, hwever, the ICBT sectr cntinues t be marginalised and is cnfrnted with myriad challenges, such as; access t finance, illegal traders, crruptin, red tapes, etc Suthern Africa Trust, Ecnmic Justice Netwrk backgrund t this wrkshp The Suthern Africa Trust and the Ecnmic Justice Netwrk has thrugh this research identified the need give the rightful beneficiaries and ICBTs themselves the pprtunity t take the respnsibility f wning the prblems and subsequent actin plans. As a result, the wrkshp was intended t create a platfrm f engagements and deliberatins, affrd participants an ccasin t share experiences, expertise, challenges and pprtunities within the ICBT sectr. It further aimed t develp practical and wrkable plans and recmmend plicies t be implemented by SADC Secretariat and natinal gvernments that wuld endeavur t strengthen, prmte and prtect the sectr Objectives f the Wrkshp The bjectives f the wrkshp were: 1. T discuss, debate and validate the research findings and recmmendatins cmmissined by SAT and EJN; 2. T create a reginal platfrm fr ICBT t lbby, advcate and influence plicies and practices; 3. T create and strengthen a netwrk f ICBT traders; and 4. T develp wrkable plan t be implemented and mnitred after the wrkshp Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 9 f 30

10 2.2.2 Expected utcmes f the wrkshp The wrkshp had the fllwing expected utcmes; The establishment f the SADC Regin ICBT Frum The frmatin and strengthening f Infrmal Crss Barder Traders Netwrk in the regin Clear radmap that will give directin t the ICBT sectr future plans, implementatin and engagements Infrmal Crss brder Traders wuld emerge with better understanding f the sectr as a whle, its challenges and pprtunities, and hw t deal with them and take the sectr t greater heights Facilitatin and wrkshp design The Suthern Africa Trust requested assistance frm Mr. Mazwe Majla f Umnth WaMazwe Cnsulting (Pty) Ltd t facilitate this Infrmal Crss-Brder Trade Wrkshp. The facilitatr wrked with the Trust and EJN management teams t plan and prepare this wrkshp. Objectives, agenda, cntent, resurce materials, and c-facilitatin were discussed and develped in cllabratin with the Trust s and EJN management team. Participants were selected and invited by the Trust and EJN. Participants represented ICBT assciatins, churches, civil rganisatins and gvernment. The wrkshp ran ver tw days. It cnsisted f plenary and break-away small discussin grups. All delegates were requested and encuraged t participate fully, respect time, each thers pinins and cntributins. While main deliberatins were cnducted in English, a translatin t Prtuguese was available. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 10 f 30

11 3. Wrkshp Purpse and Objectives 3.1. Purpses Creating an envirnment that is cnducive fr infrmal crss brder traders in the SADC regin requires a well planned and crdinated effrt amng natinal gvernments, SADC Secretariat and array f sectrs. This wrkshp created a platfrm f engagements and deliberatins, affrded participants an ccasin t share experiences, expertise, challenges and pprtunities within the ICBT sectr. It further aimed t develp practical and wrkable plans and recmmended plicies t be implemented by SADC Secretariat and natinal gvernments that wuld endeavur t strengthen, prmte and prtect the sectr. The tw day participatry wrkshp cmbined presentatin f research findings, infrmatin sharing and planning. Day One f the wrkshp was targeted at prviding the Suthern African Trust, the Ecnmic Justice Netwrk and ICBTs an in-depth understanding f the state f infrmal crss-brder trading and its rle in ecnmic grwth, emplyment creatin and pverty alleviatin in the SADC regin. Day Tw f the wrkshp participants identified strengths, weaknesses, challenges, and pprtunities fr strengthening, prmting and prtecting the ICBT sectr at bth cuntry and reginal levels Objectives T discuss, debate and validate the research findings and recmmendatins cmmissined by SAT and EJN; T create a reginal platfrm fr ICBT t lbby, advcate and influence plicies and practices; T create and strengthen a netwrk f ICBT traders; and T develp wrkable plan t be implemented and mnitred after the wrkshp T increase understanding abut the challenges and pprtunities f ICBT assciatins in SADC Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 11 f 30

12 T increase cllabratin and netwrking pprtunities amngst the ICTB trade assciatins and develp actin plans fr next steps and cntinued crdinatin. 4. Day One 4.1. Key Pints and Cnclusins, Day One Day One f the wrkshp was targeted at prviding the participants an in-depth understanding f the state f infrmal crss-brder trading and its rle in ecnmic grwth, emplyment creatin and pverty alleviatin in the SADC regin. While cuntries like Malawi, Mzambique, Zimbabwe and Zambia had established assciatins fr infrmal crss-brder traders, participants learned and acknwledged that sme cuntries like Suth Africa and DRC did nt have frmally established assciatins. Als, nly 6 f the 15 member states were represented. 1. Demcratic Republic f Cng 2. Malawi 3. Mzambique 4. Suth Africa 5. Zambia 6. Zimbabwe 4.2. The State f the ICBT Sectr in the SADC regin The key t develping an actin that will strengthen, prmte and prtect the ICBT sectr in the regin is t first understand the state f the ICBT sectr in the regin frm bth research finding and ICBT assciatin in the SADC member states. Research findings highlight the fllwing challenges faced by the ICBTs in the SADC regin: Mst gvernments in the SADC regin d nt fficially recgnize infrmal crss brder trade in that lcal ecnmic plicies in mst cuntries are nt cnducive Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 12 f 30

13 t infrmal crss brder trade. This is largely due t the negative perceptin arund the infrmal crss-brder traders wh are viewed as tax evaders and drug traders. During electins, crss brder traders are used fr plitical ends. In sme cuntries like Malawi there is mre than ne infrmal crss brder trade assciatins. Big prblems with rganizatinal leadership capacity f the crss-brder assciatins. Mst assciatins are predminantly male dminated assciatins whilst the majrity f traders are wmen Resurce capacity cnstraints i.e. access t micr finance is a challenge, mst trade assciatins and their members have n cmputers and lack business management skills. Other cnstraints include supply site cnstraints largely at brder gates. These include: Transprt t transfer gds; T many barder checks; Crrupt brder fficials; Sexual harassment f wmen traders leading t increased HIV-AIDS expsure; Strage facilities fr gds bught; Tax Regime at brders nt cnducive t infrmal crss brder traders given the high custms duties. Lack f awareness f SADC trade prtcls amngst traders results in traders declaring gds as persnal instead f business use leads and thereby nt getting the prper benefit fr traders. Limitatins f number f days t d business acrss brders vary between 30 t 90 days acrss SADC member states. Passprts prblems and different transprt requirements amngst SADC member states make it difficult fr traders t d business in a meaningful way. One crss brder trade license fr the regin might be the slutin. Fr example, a Zambian license crss brder trade license des nt wrk in Malawi but wrks in anther cuntry. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 13 f 30

14 High level recmmendatins frm research findings include: Training f traders in SADC trade prtcls, business management Rting ut negative elements in the infrmal crss brder trade Plicy frmulatin and implementatin t facilitate infrmal reginal trading ATA benefits t be transferred t infrmal brder traders 4.3. Cuntry Presentatins Each cuntry represented gave brief presentatins giving an verview f their wrk in addressing ICBT. Presentatins included infrmatin abut their experiences and lessns f the ICBT sectr in their cuntries. Sme cuntries have frmal ICBT assciatins wrking t a great degree at reginal level, thers nt rganised at all. Cuntry s represented were the DRC, Malawi, Mzambique, Suth Africa Zambia and Zimbabwe. The ICBT experiences and lessns fr the SADC cuntries are: Malawi Malawi has tw assciatins f rganised ICBTs; namely the Crss Brder Traders Assciatin f Malawi and The Infrmal Ecnmy Unin f Malawi. The Unin represents wrkers in the infrmal ecnmy f Malawi. They rganised based n 1999 ILO reslutin t establish unins in this sectr. They applied fr Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 14 f 30

15 gvernment recgnitin in 2000 and were refused recgnitin and frmal registratin due t the fact that the gvernment at the time saw the unin as a plitical uprising against its plicies. Fur and half years later, in July 2004 they were affrded recgnitin and were registered as an rganisatin. They have a cnstitutin. Sme f the challenges that the Unin faced in the frmative years include Unins in the frmal sectr asking them wh is their emplyer if they are representing wrkers Pliticians lbby their supprt twards electins and with n recgnitin pst electins. Gender issues. Wmen in this rganisatin tend t self-rganise and marginalise men frm any leadership rle in their branches. The Malawi Crss Brder Traders Assciatin is a registered assciatin with members in mst f the districts f Malawi. It regards itself as an rganisatin that prvides a vice fr the viceless. Their membership includes peple acrss the bard. They want t establish chapters in all districts. They als have gender issues in leadership like the Unin. The Malawi CBTA is already in discussins with the Zambian and Zimbabwean ICBTs t identify prducts that need t be imprted and exprted t and frm their respective cuntries. They have a scial frum with Tanzania, Malawi and Mzambique The Demcratic Republic f Cng The ICBT sectr in the DRC is rganised in 1 f the 26 regins. There is a frmal ICBT assciatin in the Katanga regin. Hwever, the traders have passes with Cng Brazzaville and Zambia. One f the key challenges faced by ICBTs in the DRC is high exprt fees that push peple t use infrmal rutes and put their lives at risk in the prcess. 1 regin f Katanga is rganized and the ther 25 nt Zimbabwe The ICBT sectr in Zimbabwe is rganised as the Zimbabwe Crss Brders Assciatin. The histry f the assciatin can be summarised as fllws: Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 15 f 30

16 It was frmed in 2000 and was registered as a trust in They have setup 6 chapters with a membership ver As a vluntary rganisatin, they have a minimum requirement f 30 peple t start a chapter. Each chapter hlds its electin and affiliates t the nerve centre. In 2004 the assciatin wrked n the Tribunal and instituted a play t highlight issues faced by crss-brder traders saw the Malawi crss brder trade assciatin brught in as a trading partner. They have 75 chapters wh can engage with MPs at lcal level. They have 12 mnths cmmn Visas. The experiences and lessns f the Zimbabwean ICBT sectr are: Plitical hijackings where the assciatin was used fr plitical agendas. During the frmative years, there has been a clse affiliatin f the assciatin with the ZCTU, the mther bdy f the ppsitin party. The labur rganisatin was identified as an ally given the histrical rle that labur has had in deliberating plicy with gvernment. As a result the assciatin s liaisn with the unin was regarded as partisan and led t victimisatin frm the ruling party. This led t an idelgical evlutin in the assciatin. Fr 3 years, the assciatin culdn t knw wh their allies were. A decisin t be aplitical was then taken t prtect the ICBTs interests. Membership fees were prhibited. Internal plitical agendas. Leadership weaknesses. Challenges t play in the same space as rganized cmmercial rganizatins. Nt being able t articulate the agenda f the assciatin. Survivalism. Given Zimbabwe s ecnmic situatin, rganising peple wh want t make a living has been a challenge fr the assciatin. Putting aside 3 hurs fr rganizatinal matters is t much t ask fr hungry peple wh see time wasted as an pprtunity cst t sell ther prducts s that they can put bread n the table fr themselves and their families. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 16 f 30

17 Due t miscnceptins, the assciatin has been blamed fr the ecnmic challenges in Zimbabwe; i.e. fr inflatin and shrtage f fd supplies. Inadequate wnership f the assciatin has seen peple wh were nt directly affected by issues t driving the prcess. SMME supprt is nn-existent t this sectr. High Visa csts Operatin Restre Order destryed trader shelters fr strage f gds. Brder jumpers taint the image f the traders in Zimbabwe. Attitudes twards Zimbabweans in bth SA and Btswana nt cnducive t the Zimbabwean ICBTs Lessns fr the assciatin are: Fcusing n satisfying peple wh are living in pverty and exit strategies t take these peple t prper SMME status. Zimbabwe Cuncil f Churches advcates mre at a plicy level. This is nt a fcal pint fr the assciatin. Hwever, it is relevant when it cmes t jb creatin related plicy discussins. Traders are nw supplying whlesalers with prducts Traders are living the frmal sectr t becme infrmal traders Cnfederatin f Zimbabwe Industry cnfirmed that the infrmal sectr is fuelling the frmal sectr. Frmal sectr is benefiting frm the infrmal sectrs. They are sustaining emplyment in the bth frmal and infrmal sectr. The rle f the assciatin is much appreciated fr keeping the ecnmy functining Mzambique MUKERO is the ICBT assciatin in Mzambique. Muker cme frm a lcal language and means taking ne cmmdity frm ne brder t anther. It was identified when Mzambiquean traders were ding business n the Swaziland/Mzambiquean brders. Yung peple used t help facilitate transitin f gds frm Mzambique t Swaziland. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 17 f 30

18 The assciatin was established in 2000 t assist with prblems that infrmal traders were facing. Wmen make up t 80% f the assciatin s membership. They are harassed by brder fficials. Frm an emplyment perspective, the fllwing bservatin has been made: The public sectr emplys 30%. Frmal sectr 20% Whilst 50% f all jbs are in infrmal sectr. In additin t challenges reprted n by ther cuntries, the assciatin is attempting t address the fllwing challenges that are emerging as a result f glbalisatin: Jb lsses leading t unemplyment. Mzambiquean wman face hardships n a daily basis as widws, divrcees and single parents. Crruptin and bribery Whilst reginal integratin f the sectr started arund January 2008, few beneficiaries f this integratin knw anything abut this prcess. Even nw in Nvember, few traders knw abut the existence f implementatin guidelines and rigin certificate that enables them nt t pay fr tax in zer based gds. It seems t be Africa culture t unblck prblems and start new nes immediately. Lessns: The infrmal sectr needs t educate their gvernments cnstantly. This sectr prvides gd pprtunity fr wmen cnfrnted by ecnmic hardships n a daily basis as widws, divrcees and single parents. They basically becme husbands t their husbands. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 18 f 30

19 4.3.5 Suth Africa In general, Suth Africa has n assciatin f infrmal crss-brder traders. This is largely due t the fact that the gvernment has put in strict laws t ensure that all SMMEs are registered with the Department f Trade and Industry fr them t get supprt in running their businesses. The Suth African Imprt Business Organisatin was been established t assist business in imprts and exprts. The plitical and ecnmic stability f the cuntry prvides SMMEs an pprtunity t be internally fcused as ppsed t externally fcused n trade. This crss brder trading sectr is largely dminated by the big crpratins. The recent xenphbic attacks in Suth Africa have impacted the ICBTs in the neighburing cuntries. Suth Africa aplgised prfusely t participants fr the unfrtunate and barbaric recent xenphbic attacks Zambia The Zambian crss brder traders assciatin was frmed in 1988 with membership currently standing at Abut 60% f the membership is made up f frm lcals and 40% frm Malawi, Zambia and Zimbabwe crss brder assciatins. The late State President supprted and listened t the assciatins issues. The assciatin has purchased prime land fr $20,000 t build a cmplex fr members. Members will pay lesser rentals and will frm part f the mall business cmmunity. Challenges: Increase in crss-brder traders has given rise t facility cnstraints. Cnglese and Zimbabwean traders insist n selling prducts n behalf f Zambian traders when they imprt int these cuntries. In the prcess, they decide the price f gds and still charge cmmissin t the Zambian traders. Lessns: Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 19 f 30

20 The wrd f infrmal sectr has negative cnntatins and maybe nt apprpriate t image the rganisatin. The wrd micr traders is mre apprpriate. Negtiate n behalf f yur membership. Fr example, freign business peple pay 3 millin Zambian Kwacha t get a 3 mnth business permit. The assciatin members currently paying 2000 Zambian Kwacha fr a 3 mnths licence. The assciatin has negtiated with parliament that it shuld be reduced t 500 Zambian kwacha and increase the permit fr six mnths. This prpsal is still under review. Allw peple frm freign cuntries t trade free. i.e. Bruma Lake in Suth Africa. Negtiated with Zambian Airways t get 56 seats allcated t assciatin members. 50% less n carg csts. Getting a free seat fr every 20 seats that the assciatins bks with the airline. 4.4 Putting it all tgether: At the end f Day One, participants identified shared challenges and pprtunities fr ICBTs in the regin. These are listed in Annexure A (see page 26). 5 Day Tw 5.1 Key Pints and Cnclusins, Day Tw Day Tw bradened the discussin that begun during the Day One t lk at what needs t be dne t strengthen, prmte and prtect ICBT sectr in the regin. The discussin arund key actin steps went further t define key prpsals and recmmendatins t the SADC Secretariat, Natinal Gvernments, Reginal ICBT Organisatin and Natinal ICBT Assciatins. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 20 f 30

21 5.1.1 Prpsals and Recmmendatins t the SADC Secretariat The SADC Secretariat shuld: Encurage member states t implement SADC trade prtcls. Recgnise the ICBT Sectr and include ICBTs in SADC prtcls. Cnsult and include the ICBT sectr in decisin making n issues that directly affect the sectr. Create a SADC fund t supprt ICBTs Prpsals and Recmmendatins t the Natinal Gvernments Natinal Gvernments in the SADC regin are encuraged t: Develp an enabling envirnment fr ICBTSs by ensuring their safety and prviding trading facilities. Ensure easy access and availability f travel dcuments fr ICBTs. Prvide ICBTs with easy access t infrmatin n custms and free trade area plicies and guidelines. Cmmit t the implementatin f SADC trade prtcls Establish and strengthen ICBT trade plicies in their wn cuntries Prpsals and Recmmendatins t the Natinal ICBT Assciatins Natinal ICBT Assciatins are encuraged t: Register with Gvernments t facilitate recgnitin f the assciatins and thereby enable effective dialgue t take place with their gvernments. Ensure that where n frmal ICBT assciatins exist they must be established and strengthen these natinal ICBT assciatins Create awareness f the ICBTs thrugh effective cmmunicatin and marketing strategies. Build capacity f their membership thrugh structures and effective training that addresses the gaps that exist in rganizatinal, leadership and marketing skills. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 21 f 30

22 Establish linkages with the private sectr t participate in ICBT infrastructure imprvement initiatives. Built relatinships with ther key stakehlders. Establish an infrmatin desk and prvide a cmprehensive service ffering t their members. Organise trade huses t prvide members with supplier infrmatin and pprtunities Prpsals and Recmmendatins n Reginal ICBT Integratin Participants prpsed and recmmended that: A reginal Infrmal Crss Barder Traders Frum in the regin shuld be established The Reginal ICBT Frum shuld build bridges with reginal blcks thrugh patrnage f the secretariat f different blcks The Reginal ICBT Frum shuld establish an integrated peratins centre. Under this Reginal ICBT Frum, a reginal Secretariat t be put in place t supprt activities f the reginal ICBT Netwrk Interim Steering Cmmittee fr Reginal ICBT Netwrk: Actin Planning With the recmmendatins and prpsals exercise and all f the ther presentatins and discussins prviding infrmatin and sme structure t participants, the final activity fr the day was t agree an interim steering cmmittee and discuss next steps. Zimbabwe was nminated as the hst cuntry fr Interim Steering Cmmittee. Given the current plitical instability in that cuntry, delegates secnded Zambia and Malawi t prvide additinal supprt as required. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 22 f 30

23 The table belw highlights the actin plan that this Interim Steering Cmmittee has been tasked with ding in the shrt t medium term: Actin Timeline Feedback Mechanism 6 mnths Mnthly prgress reprt t all delegates Develp a psitin paper n the visin and missin f the rganizatin. This shuld culminate int an actin plan fr implementatin Help establish natinal ICBTs and strengthen existing nes Act as a vice fr the unfair treatment f ICBTs Crdinatin f Reginal activities Initiate prgrammes that will grw ICBTs int big business Develp the cnstitutin f the Reginal ICBT Netwrk Minimum 1 year Maximum 2 years Onging Onging Onging Mnthly prgress reprt t all delegates Mnthly prgress reprt t all delegates Mnthly prgress reprt t all delegates Mnthly prgress reprt t all delegates 1 2 years Mnthly prgress reprt t all delegates Useful Resurces Natinal CBT, dnrs, natinal gvernment, private sectr, partners Natinal CBT, dnrs, natinal gvernment, private sectr, partners Natinal CBT, dnrs, natinal gvernment, private sectr, partners Natinal CBT, dnrs, natinal gvernment, private sectr, partners Natinal CBT, dnrs, natinal gvernment, private sectr, partners Natinal CBT, dnrs, natinal gvernment, private sectr, partners 6 Cnclusin and Next Steps 6.1 Cnclusin Every minute f every day, ICBTs acrss the SADC regin are ging ut f their way t alleviate pverty, create emplyment pprtunities and play a crucial rle t keep the ecnmy f their cuntries and the regin aflat under very difficult cnditins as Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 23 f 30

24 highlighted in this reprt. Everyne individually and cllectively is respnsible fr taking actin t eliminate the unfair practices and challenges faced by the ICBT and t ensure the strengthening, prmtin and prtectin f ICBTs in the regin. The ICBT sectr is an imprtant area f the ecnmy that requires attentin and actin frm the SADC Secretariat, Natinal Gvernments, Reginal ICBT Netwrk and Natinal ICBT Assciatins. This was an actin-riented infrmatin sharing, netwrking and planning meeting. The entire tw days were spent learning abut, thinking abut, and planning fr cncrete actin t make real changes in the lives f ICBTs in the regin. Participants develped individual cuntry and reginal level plans fr actin (see pages 20-21). Participants als made a public declaratin cmmitment t fllw thrugh with thse plans and cntinue taking actin in the future, wrking tgether t strengthen, prmte and prtect ICBTs in the regin (see the declaratin). Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 24 f 30

25 Annexes Annexure A: Challenges and Opprtunities f ICBTs in the Regin Challenges f ICBT sectr in the regin Dual membership f pr cuntries within the regin makes brder prcesses cumbersme; e.g. incnsistent tll fees are applied General lack f will by ICBTs t implement brder requirements relating t trade prtcls, i.e. certificate f rigin. Plitical uncertainty/instability in certain cuntries e.g. the DRC and Zimbabwe Bribery and crruptin at brder psts Lack f rganised structures and plicy that recgnise crss brder traders at natinal and reginal levels Lack f strng rganised structures f ICBTs at natinal and reginal levels Pr disseminatin f infrmatin n SADC Trade prtcl; i.e. Free Trade Area and hw t cmpile a certificate f rigin Lack f relevant SADC trade prtcls and laws Language barriers in the regin Lack ff access t finance frm lending institutins Pr infrastructure at brder psts. i.e. cmputers and strage space Imprt restrictins HIV and Aids Cnducive envirnment fr the implementatin Opprtunities Scarcity f cmmdities; i.e. maize and sft drinks FTAs & COMESA where ICBTS pay lw tariffs r n tariffs at all. Recgnitin f the ICBT sectr by the SADC summit n Pverty and Develpment SADC regin fund the ICBT sectr as a relevant issue SADC Secretariat will establish an ffice t disseminate its trade prtcls and treaties t all players. Ecnmic upliftment f the individual and cmmunity. Emplyment pprtunities. Frum like the ICBT wrkshp brings different peple tgether t exchange ideas and netwrk. Nature f the Free Market System Gds fund plentiful in ne area and lacking in anther area, e.g. Cca-cla is expensive in certain prvinces f Zambia and it s therefre imprted cheaper in Malawi Revenue (currency) in SADC shuld be the same all rund Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 25 f 30

26 f the reginal ICBT Netwrk Acquiring freign exchange in the regin. The black market is very expensive. Harassment f female ICBTs Market prtectin ICBTS lack f business management skills Annexure B: The Lilngwe Declaratin, 5 Nvember 2008 INFORMAL CROSS BORDER TRADE ASSOCIATIONS DECLARATION ON THE CHALLENGES AND OPPORTUNITIES IN THE SADC REGION We, members f the Infrmal Crss Brder Trade (ICBT) sectr in the SADC regin gathered tgether here in Lilngwe, Malawi n the 4-5 Nvember 2008 cmmend an express ur gratitude t the Suthern Africa Trust and Ecnmic Justice Netwrk fr this extrardinary initiative t address the plight and challenges f the ICBT sectr in the SADC regin. We welcme this interventin and cmmit urselves t partner with all stakehlders t strengthening and grwing the ecnmy and alleviate pverty in ur regin. We have n dubts whatsever n the invlvement f the small scale traders and the significant cntributin the ICBT have in the ecnmic grwth. We believe: That the lack f recgnitin f ICBT is evident, despite the fact that natinal and reginal plicy initiatives, in particular the SADC Trade Prtcl, prtray intrareginal trade as an imprtant way f spurring ecnmic develpment and pverty reductin. That ICBT cntributes significantly t the well being f citizens and if deliberate steps are taken t create an enabling plicy and regulatry envirnment, the Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 26 f 30

27 sectr can have a psitive impact twards the attainment f Millennium Develpment Gals (MDGs). That ICBT has cntributed significantly twards emplyment, creatin and incme generatin especially fr peple wh are unable t find frmal emplyment due t varius scial and ecnmic reasns and als thse wh have been retrenched frm frmal emplyment. That the reginal average mnthly value f gds traded was fund t be as high as US$2,500 per persn while sme traders cnfirmed that they lived n mre than US$1 a day which wuld nt happen if they relied n frmal emplyment incme alne. That ICBT plays an imprtant rle in ensuring fd security by mving agricultural prduce and ther fdstuffs frm where they are in surplus t where there is a deficit. That ICBT als plays a cmplementary rle t establish businesses by supplying gds in shrt supply as well as pening new markets. That n average ver 70% f infrmal crss brder traders are female wh culd either be widwed, divrced r wh simply undertake this business t supplement their spuses incmes. Nting that: The ICBT sectr in the regin is cnfrnted with myriad f challenges which makes it difficult fr members t trade. Sme f these challenges are: Drug trafficking and smuggling f precius minerals such as gld and diamnd; Custms and tax evasin which deprives gvernment f ptential revenue; Illegal currency trading; Inability t meet certain health, sanitary and envirnmental requirements; Instability f families ften due t lng absence frm hme by either spuse; Difficulties in btaining passprts and visas; Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 27 f 30

28 Refusal f entry in cuntries that may nt require visas; Excessive custms charges; Unwarranted impunding f gds; Humiliating bdy searches; Limited access t frmal credit schemes; Lack f reliable transprt; Weak assciatins; Unfavurable plicy and regulatry envirnment. And hereby reslve that: Natinal gvernments shuld imprve the cnditins f ICBTs and facilitate their transfrmatin int the frmal sectr; Need t emply mre innvative ways f tackling illicit trade practices s as t flush ut smugglers and drug traffickers frm well-meaning ICBTs; Need fr harmnisatin f trade plicies including speedier implementatin f the SADC Trade Prtcl; Need fr a reginally recgnised Cmmn Trader s Licence which wuld wrk as an incentive fr ICBTs t declare their activities fr fficial trade recrds; Need fr a reginal plicy framewrk specific t needs f ICBT r alternatively an Addendum t the Trade Prtcl n ICBT; Registratin f crss-brder traders withut necessarily subjecting them t taxes until they have reached a stage where they are able t pay such taxes withut threatening their viability; Simplificatin f custms dcuments and prcedures t cater fr all including the educatinally handicapped traders; Need fr wider cnsultatins with the pr including ICBTs befre relevant plicies are frmulated; Establishment f infrmatin centres fr disseminatin f infrmatin n custms prcedures and ther trade-related ecnmic and scial issues; Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 28 f 30

29 Need fr capacity building and awareness raising thrugh wrkshps, seminars and ther means amng stakehlders; Need fr traders t frm and strengthen crss brder traders assciatins thrugh whm plicy dialgue can be pursued; Need fr traders t embrace a culture f cmpliance with custms and ther regulatry requirements in rder t build; Faster and wider implementatin f ne-stp-brder psts; Prvisin f suitable accmmdatin, water and sanitatin facilities fr ICBTs; Prvisin f enugh market space by lcal authrities; Prvisin f mre efficient transprt and better infrastructure in the regin; Imprving accessibility f finance by traders frm financial institutins; and Cntinuatin f HIV and AIDS awareness campaigns. OUR COMMITMENT In cnclusin, we the ICBT sectr members in the SADC regin, renew ur cmmitment t ecnmic grwth, emplyment creatin and pverty alleviatin: We will cntinue t strive and intensify ur effrts t realise ur entrepreneurships. We will engage in all ur businesses in an ethical and mral standard. We will safeguards the interests f ur members. We will prmte and prtect ur sectr We will cntinue t prmte the ecnmic grwth f the regin. Infrmal Crss-Brder Traders in the SADC regin. Nvember 2008 Page 29 f 30

30 Annexure C: Radmap Reginal ICBT Natinal ICBT Register with Gvernments t facilitate recgnitin Establish and/ r strengthen Natinal ICBT Assciatins Built relatinships with ther key stakehlders Establish a reginal Secretariat t be put in place t supprt activities Create a reginal netwrk fr the assciatins Establish an integrated peratins centre Establish an infrmatin desk and ffer mre services t members SADC Trade Envirnment Establish linkages with the private sectr Build Reginal bridges with SADC and COMESA t get buy n the Reginal Netwrk Build bridges with reginal blcks thrugh patrnage f the secretariat f different blcks Recgnitin f the ICBT Sectr, i.e include ICBTs in SADC prtcls Cmmunicate the existence f ICBTs Organise trade huses t prvide members with supplier infrmatin and pprtunities Cnsultatin and inclusin f ICBT sectr in decisin making Encurage member states t implement trade prtcls Build capacity f members, i.e. training in rganisatinal, leadership and marketing skills Create a SADC fund t supprt ICBTs Encurage Member States t implement Prtcls Cmmit t implementatin f SADC trade Prtcls An ICBT thriving envirnment Ensure easy access and availability f travel dcuments Prvide infrmatin n custms, free trade plicies, etc. Establish & Strengthen ICBT trade plicies Natinal Gvernments Year 3 Year 2 Year 1 Stage II Stage I