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Informal Cross-Border Trade and Trade Facilitation Reform in Sub-Saharan Africa

Author

Listed:
  • Caroline Lesser

    (OECD)

  • Evdokia Moisé-Leeman

    (OECD)

Abstract

The informal sector still constitutes an important part of developing country economies. In Africa, it is estimated to represent 43 percent of official gross domestic product (GDP), thus being almost equivalent to the formal sector. While this phenomenon may provide short-term solutions to poor households, in the longer term, it can seriously challenge the economic development of African countries. This study explores one particular aspect of the informal economy, namely informal cross-border trade in selected Sub-Saharan African countries, and identifies which trade facilitation measures (such as those currently negotiated at the World Trade Organisation) have the potential to encourage traders to switch from informal to formal trade. The paper considers measures that help reduce direct and indirect trade transaction costs arising from mandatory import- and export-related procedures; mechanisms that simplify trade-related regulations and requirements for selected low value transactions; and policies that help enhance compliance levels with existing international trade regulations. In addition, the study explores a number of complementary measures (such as the provision of effective business support services to ?formal? traders and enhanced dialogue between traders and border agencies) which can further encourage firms to formalise their cross-border transactions. The paper does however not suggest that trade facilitation reform alone will help reduce informal cross-border trade nor that governments will be able to fully eliminate its incidence in the region.

Suggested Citation

  • Caroline Lesser & Evdokia Moisé-Leeman, 2009. "Informal Cross-Border Trade and Trade Facilitation Reform in Sub-Saharan Africa," OECD Trade Policy Papers 86, OECD Publishing.
  • Handle: RePEc:oec:traaab:86-en
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    File URL: http://dx.doi.org/10.1787/225770164564
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Zuzana Brixiova & Qingwei Meng & Mthuli Ncube, 2015. "Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, pages 141-162.
    2. Draper, Peter & Freytag, Andreas & Doyaili, Sarah Al, 2013. "Why should Sub-Saharan Africa care about the Doha Development Round?," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 7, pages 1-26.
    3. Kubo, Koji, 2016. "Myanmar's cross-border trade with China : beyond informal trade," IDE Discussion Papers 625, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Mitaritonna, Cristina & Traoré, Fousseini, 2017. "Existing data to measure African trade," IFPRI discussion papers 1618, International Food Policy Research Institute (IFPRI).
    5. Houssein Guimbard & Maëlan Le Goff, 2014. "Mega-deals: What Consequences for sub-Saharan Africa?," Working Papers 2014-28, CEPII research center.
    6. World Bank Group, 2015. "Trade Facilitation for Global and Regional Value Chains in SACU," World Bank Other Operational Studies 23831, The World Bank.
    7. Elisa Gamberoni & José Guilherme Reis, 2011. "Gender-Informing Aid for Trade : Entry Points and Initial Lessons Learned from the World Bank," World Bank Other Operational Studies 10086, The World Bank.
    8. Mthuli Ncube & Zuzana Brixiova & Meng Qingwei, 2014. "Working Paper 198 - Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?," Working Paper Series 2104, African Development Bank.
    9. Gor, Seth Omondi, 2012. "An Assessment of the Informal Sector Trade in Kenya," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 13(1).
    10. Kelly Ruth, 2010. "EU and U.S. Non-Reciprocal Preferences: Maintaining the Acquis," The Law and Development Review, De Gruyter, vol. 3(1), pages 1-39, April.
    11. repec:afe:journl:v:19:y:2017:i:1:p:1-26 is not listed on IDEAS
    12. Gamberoni, Elisa & Reis, José Guilherme, 2011. "Gender-Informing Aid for Trade: Entry Points and Initial Lessons Learned from the World Bank," World Bank - Economic Premise, The World Bank, issue 62, pages 1-4, July.
    13. Douillet, Mathilde, 2012. "Trade policies and agricultural exports of Sub-Saharan African countries: Some stylized facts and perspectives," MPRA Paper 40962, University Library of Munich, Germany.
    14. Brenton, Paul & Portugal-Perez, Alberto & Regolo, Julie, 2014. "Food prices, road infrastructure, and market integration in Central and Eastern Africa," Policy Research Working Paper Series 7003, The World Bank.
    15. Bouët, Antoine & Cosnard, Lionel & Laborde Debucquet, David, 2017. "Measuring trade integration in Africa," IFPRI discussion papers 1667, International Food Policy Research Institute (IFPRI).
    16. Efobi Uchenna, 2016. "The Reconstruction of the Border Roads and Household Welfare in Nigeria: A Gender Study," Working Papers 16/025, African Governance and Development Institute..

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