Growth impeded by obstacles to female traders in Africa, says report

Growth impeded by obstacles to female traders in Africa, says report

A recent World Bank report finds that women make major, significant contributions to trade in most African countries, but face many obstacles when it comes to fully realizing the potential of their trade activities. Removing these barriers is critical to not only women’s empowerment and but also the continent’s success in fully taking advantage of its trade potential.

Why women are important to trade and growth

According to the report, women make a major contribution to trade in most African countries in several roles, producing tradable goods as cross-border traders or manage and own firms involved in trade. Women make up the majority of cross-border traders. Cross-border trade contributes substantially to the economies of African countries, and serves as a significant source of income for around 43% of the African population.

In sub-Saharan Africa, informal cross-border trade is around 30-40% of the total formal trade between countries in the region, amounting to around US$20billion per year. Cross-border traders thus play an essential role fostering economic growth throughout the continent. In many African countries, the majority of small farmers are women, engaging in the production of crops such as maize, cassava, cotton and rice. These crops have enormous potential for increased trade between African countries and the global market. Women, in the hundreds of thousands, cross borders daily to deliver goods to areas where they are in short supply.

Obstacles women face impede Africa’s overall growth

The trade potential of women is undermined significantly by constraints that women face across the continent. There are specific non-tariff barriers that hurt the trade activities of women and women-owned enterprises. One such barrier is poor conditions and harassment when crossing the border. Although most small cross-border traders are informal, many still cross the border through official means, and are processed by officials from customs and immigration.

In a recent survey of trade in the Great Lakes region, around 80% of traders reported having to pay a bribe to cross the border. More than half had experienced physical harassment and abuse, including beatings and sexual harassment. In Cameroon and Nigeria, harassment from officials also causes delays and losses, given the fact that many of the goods cross-border traders have are perishable.

Another barrier that negatively affects women is the complexity of formal trade procedures. The length and cost of several trade procedures serve as an obstacle for cross-barrier traders, as they already have limited capacities, funds, and knowledge base of legal procedures. The issuing of export and import permits, and certification for agricultural products is costly for cross-border traders, but particularly expensive for smaller traders, many of which are women. Access to information on these trade procedures remains a large challenge, especially if the traders are inexperienced or illiterate.

These barriers often force women traders and producers to work exclusively in the informal economy. The 2013 Private Sector Development Strategy released by the African Development Bank finds that although roughly equal numbers of men and women are engaged in African commercial activity, women are predominantly found in informal agriculture sector-related activities In the informal economy, women lack the access to finance, information, and networks, which ultimately hurts their ability to develop their trading activities. They also face additional legal and policy obstacles.

Women in the enterprise field face the same troubles as women in the cross-border trade field. The rate of women’s entrepreneurship in Africa is higher than any other region. This does not equate to full economic empowerment and overall growth, however, as women are increasingly concentrated in the informal, low-profit areas of the economy. Working in the informal economy means that women are subject to laws on family, inheritance and labor that are not gender blind. This reduces the legal capacity of women and their control over their assets. These legal obstacles make it more difficult for women to transition into larger-scale business activities.

Such conditions not only prevent women from realizing the full potential of their enterprises and businesses, but also undermine the full trade and overall economic potential of the formal economies of African countries.

World Bank recommendations

As women carry out the majority of cross-border and small-scale commerce within the region, and have high rates of entrepreneurship, removing the obstacles women face to trade and entrepreneurship in Africa is crucial for spurring further economic growth. The 2011 Africa Competitiveness Report argues that rather than just increasing entrepreneurship opportunities, enabling women to move into higher-value-added activities away from the informal sector will allow them to expand their businesses and transition from self-employment to being an employer, which has clear spill-over effects for overall employment and productivity.

The World Bank calls for designing policy interventions that develop trade in ways that will benefit women. Government and donors, who are targeting their efforts to facilitate trade and increase productivity in export-oriented sectors, need to make sure their initiatives equitably benefit men and women. The report also calls for governments to help women, who face higher risk when crossing borders, to address issues like harassment at the border, confiscation of goods, lack of access to stable networks, and buyer relationships. Making this information more accessible to women, and increasing overall openness and transparency when it comes to trading rules and regulations, is key for allowing them to recognize their full potential in trading activities.

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