25.05.2017, 13:22
Harnessing rather than suppressing informal trade can give Africa a boost
OREANDA-NEWS. Africa's vast but informal cross-border trade can contribute to improving livelihoods and increasing regional integration across the continent, according to a new report presented at a conference here.
Informal cross-border trading, in which transactions are not compliant with local tax and other rules, accounts for a large share - between 20 and a hefty 70 percent - of employment in sub-Saharan Africa, and putting it on a regular footing can lift sustainable prosperity and markedly improve prospects for women, says FAO's new publication, «Formalization of informal trade in Africa».
Around half of all intra-African cross-border trade is classified as informal, indicating its large if officially invisible role. Proactive policies that recognize such activity, tapping its potential with the aim of steering it towards proper regulatory status, are to be preferred over heavy-handed approaches to eradicate or seek rents from entrepreneurs, according to FAO.
«Facilitating formalization is the only viable policy option for Africa's transformation agenda to realize its objectives,» says Suffyan Koroma, FAO senior economist and lead author of the report.
«Despite the significant contribution of the informal sector to African economies, the policy makers quite often have no information on ICBT due to lack of quality data, this has hampered the development of supporting policies to the sector,» said Clement Onyango from the Nairobi chapter of Consumer Unity and Trust Society, a non-governmental organization that is co-hosting the conference with FAO.
Informal cross-border trading, in which transactions are not compliant with local tax and other rules, accounts for a large share - between 20 and a hefty 70 percent - of employment in sub-Saharan Africa, and putting it on a regular footing can lift sustainable prosperity and markedly improve prospects for women, says FAO's new publication, «Formalization of informal trade in Africa».
Around half of all intra-African cross-border trade is classified as informal, indicating its large if officially invisible role. Proactive policies that recognize such activity, tapping its potential with the aim of steering it towards proper regulatory status, are to be preferred over heavy-handed approaches to eradicate or seek rents from entrepreneurs, according to FAO.
«Facilitating formalization is the only viable policy option for Africa's transformation agenda to realize its objectives,» says Suffyan Koroma, FAO senior economist and lead author of the report.
«Despite the significant contribution of the informal sector to African economies, the policy makers quite often have no information on ICBT due to lack of quality data, this has hampered the development of supporting policies to the sector,» said Clement Onyango from the Nairobi chapter of Consumer Unity and Trust Society, a non-governmental organization that is co-hosting the conference with FAO.
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