ASSESSING THE INFORMAL CROSS BORDER TRADE BETWEEN KENYA AND UGANDA
Isaac Nkoroi - Masters of Arts in International Studies, Institute of Diplomacy and International Studies, University of Nairobi, Kenya
ABSTRACT
Kenya and Uganda are important trading partners, but formal trade links between them have been constrained by a myriad of factors which have spurred the growth of informal trade. Trade between Kenya and Uganda is substantial and vital to both countries. The overall objective of the study was to investigate the informal cross border trade between Kenya and Uganda. Specifically the study aimed; to evaluate the role of government taxation policies on informal cross border trade between Kenya and Uganda, to establish the type of commodities being traded in the informal cross border trade between Kenya and Uganda and to assess the influence of trade liberalization policies on informal cross border trade between Kenya and Uganda. The study targeted 150 traders operating across the Kenya Uganda border as well as 10 key informants who included customs officials, security and immigration personnel. Respondents were sampled purposively, section will be picked randomly prioritize the traders perspectives of the trade and willingness to participate, however a deliberate effort will be made to triangulate all their views. The study used both primary and secondary data. Interview schedule as well as a questionnaire was used. Most of the information collected was analyzed quantitatively using SPSS and the results further triangulated with other information derived from direct observation and interviews that was derive qualitative data from key informants. The study revealed that ICBT is a major source of livelihood for people living at border posts, while for government and other institutions such as URA and Police, ICBT as illegal activity/disguised smuggling and a source of unfair competition thus a loss of revenue. ICBT is carried out by men and women of whom, 56 percent were Kenyans and 44% Uganda nationals, and 88 percent are able to read and write. The study further observed that 84 percent of household businesses were operating from permanent structures. This present how well ICBT thrives and benefits traders, leading to structural development. Several reasons were advanced for engaging in ICBT, including; it’s a way to earn income, employment thus a major source of livelihood for people’s survival. It was also reported that the lucrative markets offered by the counterparts in the bordering country promotes and attract people to engage in the trade. Besides it was mentioned that traders have a tendency to evade high taxes and other customs levies; bureaucratic licensing thus ICBT presents a viable alternative. ICBT is mainly dominated by women and the youth. The following recommendations will go a long way in informing policy and decision making processes for improving the livelihood of those engaged in ICBT as well as improving the ICBT exercise between Kenya and Uganda. Information is very valuable in facilitating informal cross border trade. Therefore at operational level there is need for gender specific strategies, programs and activities that recognize the different needs and capacities of men and women traders. Informal cross border traders cited financial services as a critical problem. The shortage of ready finance hinders the expansion of ICBT activities. Therefore, it is necessary to explore alternative lending ways that are responsive to the unique demands of the informal cross border trade. Inclusion of informal cross border trade in the vision of policymakers will help to facilitate their individual economic empowerment as well as enhancing their role as a significant component of the regional trade activities.
