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Tuesday, March 17, 2015

Wheelbarrows of dollars: Understanding informal trade in East Africa

(Medeshi)- While the continent has seen increased trade with global powerhouses such as China and India, Africa’s formal trade flows are generally hampered by poor infrastructure and bureaucratic systems that lead to long delays at ports and borders, and increase transportation costs.

The sophistication of the Somali-led informal network is remarkable, said Ecobank’s head of research, Edward George.
Furthermore, formal regional trade within Africa remains the lowest in the world.
Compared with trade between borders in Europe (around 70%) and Asia (50%), intra-African trade averaged around a measly 10-12% over the past decade, according to the United Nations Economic Commission for Africa (UNECA).
However, according to Ecobank’s head of research, Edward George, formal trade paints a very small picture of overall trade flows on the continent, with informal trade being comparatively innovative. And one example of this can be seen in illicit Somali trade across East and Central Africa.
More at How We Made It In Africa