The United Nations Economic Commission for Africa (UNECA) on Friday called for harmonizing informal cross-border trade toward effectively monitoring intra-Africa trade.
The UNECA said in a statement issued on Friday that informal cross-border trade in Africa is known to be large and an important contributor to the livelihoods of millions of Africans, but there are no agreed methods to measure it accurately.
“Understanding the scale, magnitude and characteristics of informal cross-border trade will be instrumental in accurately monitoring intra-African trade, as well as the development of appropriate economic policy,” a UNECA statement quoted Melaku Geboye Desta, coordinator of the African Trade Policy Center at the UNECA, as saying.
Desta noted that official trade statistics often capture formal trade and leave out informal trade, leading to an underestimation of the magnitude of intra-African trade.
He said the size of informal cross-border trade in Africa means that the level of intra-African trade is probably much higher than the figure that is often used by experts.
Acknowledging that there were some estimates of informal cross-border trade in Africa, Desta observed that the lack of an agreed definition of the phenomenon and common methodological tools used by different national statistical agencies have diminished the quality and utility of the resulting estimates.
According to the UNECA, there is no universally agreed definition of informal cross-border trade, as it has often been conflated with smuggling and other illegal practices.
It said informal cross-border trade has been broadly defined to include informal or unregistered traders and firms operating entirely outside the formal economy and the formal or registered firms, fully evading trade-related regulations and duties, for example, avoiding official border crossing posts.
The UNECA made the call during the first physical meeting of the task force on developing a harmonized methodology for informal cross-border trade data collection.
The task force was established by the African Union, in collaboration with the UNECA and the African Export-Import Bank, with a mandate to provide political and technical guidance to the process of developing the continental methodology for informal cross-border trade data collection and overseeing its implementation.