Informal trade data key to monitoring intra-African trade, says UNECA

 

Headquarters of the United Nations Economic Commission for Africa, UNECA, with the blue UN flag, Addis Ababa, Ethiopia. (Photo by: Gunter Fischer/Education Images/Universal Images Group via Getty Images)

By Femi Adekoya

The United Nations Economic Commission for Africa (UNECA) has emphasized the need for trade data to incorporate informal trade in the measurement of intra-African trade in order to get significant value and idea of the true state of affairs among entities.

According to UNECA, official trade statistics often capture formal trade and leave out informal trade, leading to underestimation of intra-African trade, intra-Regional Economic Community (REC) trade and African trade in general.

It noted that understanding the scale of informal trade will be instrumental in accurately monitoring intra-African trade, particularly in the context of the AfCFTA.

“Since the majority of the informal cross-border traders are women, Informal Cross Border Trade (ICBT) data is key in understanding the different dynamics at play that could inform the development and implementation of gender sensitive trade policies and processes” said Stephen Karingi, Director of the Regional Integration and Trade Division of ECA speaking at the virtual launch of the Phase II ECA and Afreximbank project.

Based on ECA study, ICBT is estimated to be between 7 and 16 percent of the formal intra-African trade flows and between 30 and 72 percent of formal trade between neighbouring countries. These are significant figures and have important implications for the value, composition and sophistication of intra-African trade.

Trade Advisor at the African Union Economic Development, Trade, Industry & Mining department, Brian Mureverwi, emphasised the need to come up with a concrete methodology that captures ICBT data in order to come up with evidence-based policies. He further added that once the data are captured, it will feed into the African Trade Observatory portal where policy makers will be able to access the information in the comfort of their offices.

On his part, Principal Research Economist and Senior manager at the African Export-Import Bank (Afreximbank), Anthony Coleman, noted that for the bank, it is important to understand the characteristics including what products are dominating ICBT, the volume of the trade, the busiest corridors, as well as the nature of infrastructure in order for the institution to shape its intervention in addressing constraints in informal cross border trade in the continent.

Building on the Pilot Phase of the project, the three-year project financed by Afreximbank will entail the development of a continental methodology for ICBT data collection in Africa.