An Assessment of The Problems / Obstacles Faced By Informal Cross Border Traders in Zambia: The Case For Chipata And Livingstone Towns
Abstract
Informal cross border trade (ICBT) is a phenomenon that has been in existence for some time now. A number of reasons have been cited to explain the emergence of informal cross border trade and. what seems to be common in this discourse, is that informal cross border trade emerged because of the controls in the formal trading system. Because of the stringent
procedures, which cannot be followed by financially weak people, informal cross border traders emerged, In his paper on Policy Reforms and Structural Adjustment in Zambia, the case of Agriculture and Trade, Saasa, (1995) asserts that there is a very strong correlation between overvalued exchange rates and cross border trade and attributed the emergence; of' cross border bca.de! in
Zambia, to the then overvalued currency. MacanjiOj,(1999) argues that informal cross border trade (ICBT) has evolved over time and constitutes one of the main ways of overcoming barriers to formal regional trade. Although its existence is known, its magnitude and mode of functioning have not been widely documented.. This lack of documentation leads to the recording of misleading figures. in tin
Description
This study assesses the problems / obstacles faced by informal cross border traders in Zambia, using Chipata and Livinstone towns as case studies. The; study ’was done with the understanding that Zambia is part of the COMESA Free Trade Area (FTA). 'Due study asserts that tire COMESA Free Trade Area puts more emphasis on formal trade and only assumes the role of the informal cross border traders in regional trade. While provisions such as zero tariff and the COMESA certificate of origin have been put in, place to promote hade among members of the Free Trade Area, the informal cross border traders have; not benefited from these measures. The study hypothesizes that COMESA FTA has not eliminated the obstacles faced by informal cross border traders and that the non-availability of formal sector employment has led to people opting for informal cross border trade as an alternative source of livelihood. Thus the theoretical underpinning of the study was based on the early theory of regional! integration Theory shows that from economic integration emerged cross border trade, Economic intonation brings together the economies of two or mores countries, typically with same geographical proximity, through the removal of economic barriers such as tariffs and immigration controls. This is aimed at improving the standard of living as well as achieving peaceful relations among the participating countries.