Home NewsAfrica Measuring informal cross-border trade key to intra-African trade – ECA

Measuring informal cross-border trade key to intra-African trade – ECA

by Haruna Gimba

By Asmau Ahmad

The Economic Commission for Africa (ECA) says the continent must harmonise the data on informal cross-border trade which has remained a key feature of Africa’s trade landscape.

The Director, Regional Integration and Trade at the ECA, Stephen Karingi, said this on Tuesday in a statement on the commission’s website.

He said that timely collation of the data was critical to the implementation of the African Continental Free Trade Area (AfCTA).

Karingi spoke in Zambia while opening a two-day hybrid meeting to review and validate the Continental Methodology for Informal Cross-Border Trade (ICBT) Data Collection in Africa.

He said that in spite of its importance to the livelihoods of millions of Africans, informal trade was not well understood on the continent.

The director said this made the African Union Commission (AUC), ECA and Afreximbank to establish a Task Force on developing a harmonised methodology for ICBT Data Collection.

“Informal cross-border trade is a key feature of Africa’s trade landscape.

“Research by ECA estimates ICBT to be equivalent to between seven and 16 per cent of all formal intra-African trade flows and between 30 and 72 per cent of formal trade between neighbouring countries.

“In spite of its significant contribution to the economy, ICBT remains largely undocumented and current efforts to collect data on ICBT within the continent are largely fragmented and unsystematic,” he said.

Karingi said that the major challenge was the differences in definitions and methodologies used by various countries and organisations.

This, he observed, led to challenges in comparability of available data and integrating it into formal trade statistics.

The director also said the unreliability of the data on ICBT had contributed to minimal recognition of its importance in policy frameworks.

According to him, accurate trade statistics are important inputs to national accounts and balance of payments statistics.

Karingi said it helps to improve econometric forecasting models for key macroeconomic variables.

Zambia’s Interim Statistician-General, Mulenga Musepa, said the imperative for ICBT data collection could not be overemphasised.

Musepa said this was because understanding the scale, magnitude and characteristics of ICBT was imperative to accurate monitoring of intra-African trade.

“The challenges related to ICBT data collection notwithstanding, understanding the ICBT landscape is important for policy design.

“As well as the development of the relevant initiatives targeted at the major trade corridors within our countries and regions,” Musepa said.

He said National Statistical Offices should conduct timely ICBT data collection, which should be institutionalised at country level to ensure its sustainability.

Mr Djamel Ghrib, said that a validated ICBT methodology would be presented to the Specialised Technical Committees (STCs) on Finance, Monetary Affairs, Economic Planning and Integration in July 2023.

He added that the continental methodology for ICBT data collection was validated by experts from Regional Economic Communities and National Statistics Offices of 29 AU member states and other key stakeholders.

Ghrib, the Director of Economic Development, Tourism, Trade, Industry and Mining Department, AUC, was represented by Mr Tapiwa Cheuka, Trade Policy Officer at the Commission.

He said the continental methodology would be presented to Heads of States and Governments during the 2024 African Union Summit.

Meanwhile, Anthony Coleman, Principal Economist at Afreximbank urged all participants to be advocates and ambassadors of the exercise.

Coleman said: “Partners can do so much but for the sustainable and successful implementation of the AfCFTA, governments should take ownership and allocate a budget for collecting ICBT data.”

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