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Informal cross-border trade in Africa: How much? Why? And what impact?

Author

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  • Bouet, Antoine
  • Pace, Kathryn
  • Glauber, Joseph W.

Abstract

Informal cross-border trade (ICBT) represents a prominent phenomenon in Africa. Several studies suggest that for certain products and countries, the value of informal trade may meet or even exceed the value of formal trade. This paper provides a review of existing efforts to measure informal trade. We list 18 initiatives aimed at measuring ICBT in Africa. The paper also summarizes discussions conducted with many stakeholders in Africa between December 2016 and May 2018 regarding the measurement, the determinants, and the implications of ICBT. The methodologies used to measure ICBT in Africa differ widely, but they do confirm that informal trade in Africa is both sizeable and volatile. Both evidence on the determinants of ICBT and discussions with stakeholders suggest that policies should aim to reduce the existing costs associated with formal trade and provide positive incentives for traders and producers to move into the formal economy in order to avoid the loss of economic potential stemming from informal trade.

Suggested Citation

  • Bouet, Antoine & Pace, Kathryn & Glauber, Joseph W., 2018. "Informal cross-border trade in Africa: How much? Why? And what impact?," IFPRI discussion papers 1783, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1783
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    Cited by:

    1. Lionel Fontagné & Mathilde Lebrand & Siobhan Murray & Michele Ruta & Gianluca Santoni, 2023. "Trade and Infrastructure Integration in Africa," Working Papers 2023-14, CEPII research center.
    2. Walkenhorst, Peter, 2021. "Disability, Empathy and Trade: Evidence from Small-Scale Cross-Border Transactions in Uganda," MPRA Paper 112796, University Library of Munich, Germany.

    More about this item

    Keywords

    AFRICA; AFRICA SOUTH OF SAHARA; trade; trade barriers; trade policies; tariffs; informal cross-border trade; smuggling; F14 Empirical Studies of Trade; F15 Economic Integration;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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