Data on informal cross-border trade is critical, says ECA

Mulenga Musepa

Timely data collection on informal cross-border trade is critical to informing intra-African trade on the back of the implementation of the African Continental Free Trade Area agreement, experts say.

Despite its importance to the livelihoods of millions of Africans, informal trade is not well understood on the continent.

As a result, the African Union Commission (AUC), with support from the Economic Commission for Africa (ECA) and Afreximbank, established a task force on developing a harmonised methodology for informal cross-border trade data collection.

Opening a two-day hybrid meeting to review and validate the continental methodology for informal cross-border data collection in Africa, Stephen Karingi, the director of regional integration and trade at the ECA, said informal cross-border trade (ICBT) is a key feature of Africa’s trade landscape.

Research by ECA estimates ICBT to be equivalent to between 7% and 16% of all formal intra-African trade flows, and between 30% and 72% of formal trade between neighbouring countries.

“Despite its significant contribution to the economy, ICBT remains largely undocumented,” Karingi said, noting that current efforts to collect data on ICBT within the continent were largely fragmented and unsystematic.

“For example, definitions and methodologies used by the various countries and organisations often differ, leading to challenges in comparability of available data, as well as integration into the formal trade statistics.

“True to the saying: What is not defined cannot be measured, and what is not measured cannot be improved,” said Karingi, emphasising that the dearth of reliable and regular data on ICBT has contributed to minimal recognition of its important role in policy frameworks.

Zambia Statistics Agency interim statistician general Mulenga Musepa said the imperative for ICBT data collection cannot be overemphasised, because understanding the scale, magnitude and characteristics of ICBT is instrumental to accurately monitoring intra-African trade.

Tapiwa Cheuka, trade policy officer at the AUC, said the validated ICBT methodology will be presented to the specialised technical committees on finance, monetary affairs, economic planning and integration in July 2023, with anticipated adoption by the heads of state and governments at the African Union Summit in 2024. – ECA

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