‘Small cross border traders benefit less from COMESA FTA’

‘Small cross border traders benefit less from COMESA FTA’
Written by Mutuna Chanda in Kasumbalesa
Thursday, January 29, 2009 9:54:02 AM

COMMERCE acting permanent secretary Gideon Lintini has said evidence shows that small cross border traders have benefited less from the COMESA Free Trade Area.

And Democratic Republic of Congo (DRC) secretary general in the external trade ministry Albert Kwete has warned Congolese authorities in the newly-established Trade Information Desk at Kasumbalesa border not to use it as an avenue to defeat efforts to fight poverty.

During the launch of the Trade Information Desk for small-scale cross border traders at Kasumbalesa border on the DRC side on Tuesday, Lintini said the Common Market for Eastern and Southern Africa (COMESA) Free Trade Area had to a large extent facilitated trade for large and medium exporters and manufacturers while small cross border traders had not benefited as much.

“Despite this, the cross border traders have continued to play a significant role in providing employment to population groups who otherwise would not be employed in the formal sector thereby giving them the means to earn incomes and sustain their livelihoods particularly women and the youth,” Lintini said.

Lintini said cross border trade ensured food security in border areas by facilitating the movement of food from areas of abundance to areas of deficit and in the process stimulating increased food production.

“This small-scale trade should therefore be supported and facilitated through the provision of information and other support services as envisaged in the COMESA Simplified Trade Regime,” he said.

The Trade Information Desk at Kasumbalesa is a joint COMESA, British Department for International Development (DFID) and United States Agency for International Development (USAID) initiative called ‘Trading for Peace’ which aims at encouraging trading and peaceful co-existence between DRC and neighbouring countries.

The desk is the first of its kind among COMESA member states.

And officiating at the launch, Kwete urged officials running the desk to act responsibly and completely frank in respect of ethical and moral values to ensure that the aims of facilitating reduced costs of business incurred by small-scale cross border traders were achieved.

He said studies had shown that informal and illegal small-scale cross border trade constituted 35 per cent of all official transactions in East Africa and COMESA.

He said this prompted the governments in COMESA to adopt the Simplified Trade Regime as an important aspect of formalising informal trade.

And COMESA assistant secretary general Nagla El-Husseiny said the desk would provide information to small-scale traders on the operational modalities of the COMESA Simplified Trade Regime.

“The COMESA Simplified Trade Regime is intended to allow small scale traders to enjoy duty free and quota free entry of their goods across the borders in COMESA and therefore reducing costs incurred by traders,” said El-Husseiny. “The need to reduce the cost of doing business for small scale traders cannot be overemphasised especially given the current high costs that have been perpetuated by among other factors the use of informal channels, the payment of unregulated fees and charges and inadequate facilities and systems at border posts.”