The Cross Border Traders Association of Malawi says the removal of trade barriers can help informal traders to move from one country to another with lesser challenges.
The association’s chairperson, Dixies Chanza, said currently the major challenge for the local cross border traders is the volatile exchange rate.
“The rand is now at K48, making it difficult for importers to sell their items quickly. The traders have to sell at high rates because they, too, purchased them at high prices in South Africa,” he said.
Chanza also cited corruption and some delays at the border posts as some of the challenges cross border traders have to contend with.
“Delays at our border posts pose a big challenge for the cross border traders. Songwe Border Post is the worst in the delays. One bus without a trailer can take more than eight hours to clear,” he said.
But Chanza said it is important for local cross border traders to embrace the Simplified Trade Regime (STR), arguing that this would help them to export more.
STR is an initiative by the 19-member Common Market for Eastern and Southern Africa (Comesa) launched in 2010 to facilitate trade and reduce poverty by recognising that informal trading, particularly cross border trade, is an important source of employment.
The regional economic blocs of Comesa and East African Community (EAC) launched the STR for selected types of commodities whereby small-scale traders benefit from a simplified customs document and a simplified certificate of origin.
Under this trade regime, goods that are originating from member countries and whose value does not exceed $1 000 (about K420 000) per consignment, qualify automatically for duty-free entry into the respective markets.
According to the Trade and Law Centre (Tralac) report, cross border trade constitutes a significant proportion of regional trade in many African countries, including Malawi.
The report indicates that between 30 and 40 percent of total intra Southern African Development Community (Sadc) trade attributed to International Cross Border Trade (ICBT).
It further says the average estimate value of ICBT from this region is valued at about $17.6 billion annually.