Cross border traders reap from 2012/13 budget measure

Cross border traders have started reaping the benefits of the increased consignment threshold under the Simplified Trade Regime (STR) to $1 000 (K303 000) from the previous $500 (K151 500), according to the Cross Broader Trade Association (CBTA).

In the 2012/13 national budget, Finance Minister Dr Ken Lipenga said as a way of promoting small cross border trade among countries within the 19-member Common Market for Eastern and Southern Africa (Comesa), it was resolved that the consignment threshold be increased.

“To conform to the STR requirements, government has adopted the proposal to adjust the threshold for the STR to be increased accordingly,” announced Lipenga.

STR is an initiative by Comesa trade bloc to facilitate trade and reduce poverty by recognising that informal trading, particularly cross border trade, is an important source of employment for thousands of people.

Currently, the trade regime—that allows small and informal traders to have payment of duty scrapped on specified goods not exceeding $1 000.

The regime applies at Mwami Border Post between Malawi and Zambia and also at Nyamapanda, a border post between Mozambique and Zimbabwe.

Recounting the benefits of the increased threshold since the 2012/13 budget was passed, CBTA chairperson Dexes Chambakata Chanza told Business News yesterday that they are now moving large consignment of goods as compared to when the threshold was a $500.

“Cross border traders are moving a number of goods since the amount [$1 000] is quite substantial to cater for more goods as well. The increased amount has also improved the livelihoods of cross border traders because this also means increased earnings,” explained Chanza.

Under the STR, the traders are encouraged to export to as far as Cape Town in South Africa goods that are made locally made.

Some of the goods being exported include Orange Squash, Fanta, Coca-Cola, Sprite, rice, pigeon peas, rice and groundnuts and timber.

Chanza said the budget measure has also enabled them to expand their businesses because with the increased threshold, it also means increased number of goods exported.

“Since we have a wider choice of goods, the threshold has seen the traders exporting goods that were not being exported before,” he said.

Since the launch of STR, figures from CBTA show that trade between Malawi, Zambia and Zimbabwe has markedly gone up.

Chanza has since encouraged cross border traders to take advantage of STR to enjoy its full benefits.

Malawi Revenue Authority (MRA) public tax collector’s public relations and taxpayer education manager Steve Kapoloma earlier noted that STR has reduced the time the traders spend on borders to clear their goods.

STR does not replace the normal requirements for clearance of commercial goods, but is intended to cater specifically for the needs of small-scale traders, according to Comesa.

Over the years, cross border trade has proved to be an important activity in ensuring supply and access of basic needs by the border community.

Cross border trade has over the years, played a significant role in averting widespread food insecurity in Southern Africa because the traders’ earnings are used to improve household living.