Empowering Women by Supporting Small-Scale Cross-Border Trade

5 June 2018

Over the last six years, the Rwandese non-governmental organisation Pro-Femmes/Twese Hamwe has been implementing a project aimed at empowering women cross-border traders. Why is it important to facilitate small-scale cross-border trade from a gender perspective?

Pro-Femmes/Twese Hamwe is a Rwandan civil society umbrella gathering together organisations dedicated to women’s empowerment, gender equality, peace building, and development in Rwanda. Currently, the umbrella represents 53 member organisations across the country. It aims at promoting a peaceful and stable Rwandan society free from all forms of gender discrimination and characterised by gender equality and equity, as part of a broader process towards sustainable development.

Between 2012 and March 2018, and with support from TradeMark East Africa (TMEA), Pro-Femmes/Twese Hamwe implemented a project to increase the economic power of women in informal cross-border trade. The project started from scratch to identify women who were trading informally across borders, and who had no capital, in order to help them become registered and recognised, and build successful businesses. Over six years, support has been given to 63 cooperatives with over 3,000 members, of whom 98 percent are women, in nine main border districts, developing their knowledge and skills and helping them to gain access to finance and markets.

Why support women cross-border traders?

Informal cross-border trade (ICBT) – which can also be referred to as small-scale cross-border trade – is pervasive in Africa, and while estimates vary, they all indicate that it constitutes a significant part of total intra-African trade. Rwanda is a case in point, as according to a report from the country’s Ministry of Trade and Industry entitled “National Cross-Border Trade Strategy: 2012–2017,” informal exports to neighbouring countries were 51 percent higher than formal exports in 2011. As such, ICBT has important economic and social implications, making it an essential issue from an inclusion and sustainable development perspective.

Despite significant progress towards effective regional integration and other relevant trade facilitation mechanisms, cross-border trade between Rwanda and its neighbours remains highly underdeveloped. Supporting and formalising ICBT and increasing the value of traders’ businesses could thus significantly contribute to the country’s overall growth and development. Numerous studies highlight that border economies, especially in Africa, benefit greatly from cross-border trade in that it enhances food security, provides employment, and allows millions of people to have access to goods and services unavailable in their own countries, or at cheaper prices. A World Bank report in 2011[1] noted that small-scale cross-border trade has a more direct impact on poor households than large-scale trade.

Importantly, gender is a fundamental dimension when it comes to ICBT. A large part of cross-border traders are poor women traders who, by crossing borders every day and selling their products, make a major contribution to the welfare of their families and communities. Often, they play a key role in food security, carrying basic food products from areas where they are comparatively cheap to others where they are in short supply. A 2012 study found that in the Great Lakes region, the majority of informal cross-border traders are women (74 percent). It is estimated that 90 percent of these women traders rely on cross-border trade as their only source of income. Efforts to facilitate ICBT and help small-scale cross-border traders to develop their economic activities can thus play a key role in supporting women’s economic empowerment, which in turn can lead to broader social transformation in a variety of ways.

Gender is considered by partner states in the East African Community (EAC – of which Rwanda is a member) as a crucial aspect of cross-border trade, which itself is essential for the broader process of socio-economic development and sustainable growth in the region. This is positive, as this recognition also means that EAC members recognise that ICBT should be a priority area for any country willing to strengthen poverty alleviation efforts with particular impact on women. In short, facilitating and formalising cross-border trade can go hand in hand with women’s economic empowerment, while also leading to a reduction in gender-based violence related to the informal and insecure nature of their activities.

Challenges faced by women cross-border traders

Policy measures and projects aimed at supporting small-scale cross-border trade are aligned with Rwanda’s commitment to achieving gender equality, as well as the empowerment of women, as defined in Vision 2020, the government’s development programme to transform Rwanda into a middle-income economy by 2020, and its implementation through the Second Economic Development and Poverty Reduction Strategy (EDPRS II) for 2013–18. Gender equality is a cross-cutting issue which needs to be integrated in all sectoral policies and strategies because men and women can experience the processes of development and the impact of policies in different ways.

Although countries have adopted strategies and signed treaties to respond to hindrances in cross-border trade, especially informal trade, the traders continue to face challenges. They include:

  • limited knowledge and skills in the context of increased market linkages through information and communications technology (ICT);
  • limited access to finance because of the burdensome conditions set by the financial sector on obtaining loans, such as high interest rates, and requirements for collateral lacked by most women engaged in informal cross-border trade;
  • inadequate start-up capital;
  • slow implementation of existing policies on cross-border trade;
  • limited knowledge about taxes, duties, and tax exemptions, and the threat of informal fines and confiscation of goods;
  • inconsistent and non-harmonised national laws and policies and their regional instruments.
     

While most of these constraints also apply to men engaged in small-scale cross-border trade activities, they tend to affect women in a disproportionate manner. Moreover, women face a number of gender-specific risks and challenges in border areas, including verbal violence, harassment, and sexual abuse. Very often, they also need to carry heavy sacks of merchandise on long distances due to insufficient storage facilities.

Potential solutions

For small-scale cross-border trade to have a more direct impact on poor households and to promote women’s economic empowerment, efforts to support and develop it need to be increased and designed in a targeted way. Tackling the challenges related to informal cross-border trade and creating a gender-sensitive border environment can go a long way in helping reduce the extreme poverty still faced by women in the border communities of most countries in the region.

Now that cooperatives have been set up, and are engaging in value addition activities, there is a need to strengthen market access and connections, as well as to increase knowledge and skills in this area. Future intervention should work on enhancing market linkages using ICT, especially mobile phones; 89 percent of the beneficiaries of the TMEA project implemented by Pro-Femmes/Twese Hamwe use phones as their main channel of receiving and communicating market information.

With regard to the trade environment, Rwanda has supportive legal and policy frameworks in place, but proper implementation of those policies is still lacking. In the future, there is a need to bridge that gap by targeted monitoring of specific policies and advocacy for improved implementation.

Focusing on supporting cooperatives to meet Rwanda Standards Board criteria and conducting policy advocacy for a simplification of product standards for small businesses are also important. Building the capacity of existing cooperatives in their various functions will continue to be necessary, through ensuring a system of training the trainers, so that trained cooperatives can train the new ones following in their footsteps.

Lessons learnt

Pro-Femme/Twese Hamwe has learnt a lot from different perspectives on informal cross-border trade and what needs to be improved to harness its development potential, including through the work being done for the empowerment of women cross-border traders. Ensuring direct support to them and improving the conditions in which they conduct their cross-border trade activities are vital, as are promoting access to finance and loans security and supporting the creation of more cross-border trade cooperatives to ease the process of developing capacity.

Future efforts should be invested in ensuring cooperatives meet the required basic product standards for national and regional markets. Advocacy for the simplification of product standards and licences should also be pursued. Continued advocacy for cooperative members to access finance is also important, together with capacity building in developing business plans and negotiating with financial institutions to increase loan repayment periods and reduce interest rates.

Synergy and effective collaboration by stakeholders in all their activities and policy implementation have to be reinforced if this segment of trade is to be turned into a meaningful driver for sustainable development in the region.

Author: Emma Marie Bugingo, Executive Secretary, Pro-Femmes/Twese Hamwe


[1] World Bank. Women and Trade in Africa: Realizing the Potential. 2013.

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