AfCTA and women informal traders in Africa: Opportunities, challenges and the future
By Dr. Sandra Bhatasara
Rhodes University and Marondera University of Agricultural Sciences and Technology
The AfCFTA is the world's largest free trade area bringing together the 55 countries of the African Union (AU) and eight (8) Regional Economic Communities (RECs).As part of its mandate, the AfCFTA is expected to eliminate trade barriers and boost intra-Africa trade.A key issue, however, revolves is around gender and social inclusion in terms of the implementation of the trade agreement. Women's contribution towards socioeconomic growth in Africa is well documented in the development literature and widely acknowledged in practice. At the same time, women play an important role in intra-regional trade activities, through formal trade or informal and small-scale activities.
Africa's informal sector accounts for 85 per cent of the continent's total economic activity; and while women account for 90 per cent of the labour force in the informal sector, they constitute 70 per cent of informal traders. Informal (unregistered) traders or firms are those operating entirely outside the formal economy.
Cross-border trade is dominated by a highly mobile class of women specialising in informal long-distance business activities. It constitutes a vital source of employment and livelihood for the poor, in particular for low-income and low-skilled women, in border districts. It has become a viable economic activity that supplements income to improve food security in households, generates employment and improves living standards.
However, women informal cross-border traders and other small-scale traders, as revealed in a study by Zarrilli and Lopez (2020) 1 face challenges that include cumbersome border processes, weak governance at border posts, corruption and bribery, harassment, poor border facilities, payment of undue fees, misinformation about customs procedures and regulations, lack of access to capital and assets, and limited entrepreneurial skills and literacy, among others.
Again, UN Women (2010) 2 observed that women informal cross border traders still suffer from invisibility, stigmatisation, violence, harassment, poor working conditions, and a lack of recognition for their economic contribution.
It is against this background that AfCTA becomes highly important to promote gender equity, social inclusion and economic empowerment.Two clauses explicitly recognize the inclusion of women in the AfCFTA Agreement and accompanying Protocols. Firstly, general objective (3(e) seekswhich looks to promote "gender equality and structural transformation" of the African states. Secondly, as per Article 27 (2) (d) of the Protocol on Trade in Services, State Parties are mandated to: "improve the export capacity of both formal and informal service suppliers, with particular attention to micro, small and medium size; women and youth service suppliers".
According to UN Women (2019) 3 , under the AfCFTA, women in informal cross-border trade (WICBT) will have greater opportunities due to the tariff reductions promised under the Protocol on Trade in Goods. However, instances where policy pronouncements and reality contradict are possible. It is therefore, important to show case progress regarding what has changed for various categories of women in different countries since the inception of AfCTA.
To note is that gender assessments on the progress are still lacking. Anecdotal evidence shows that free movement is allowing the seamless mobility of women traders across borders and secondly the movement of goods and services.Early adopters have already taken advantage of eased border conditions (APRM 2022). An example is in the southern region of the continent where women informal cross border traders opt to operate by identifying countries that have removed visa requirements within the SADC region and then proceeded to trade in those countries.
The opportunity for women informal traders to move freely across border broadens the diversity of goods to be traded as well as the markets that will be accessible to informal cross border traders.Rwanda and Kenya have opened their borders for visa-free travel for fellow Africans, following the example of Benin, The Gambia and Seychelles. This is positive for women-cross border traders surrounding and beyond this member states who are now able to move as persons and also their goods. This is promoting women's inclusion in trade and improving incomes. This has also made women's labor more mobile, promoting more access to employment and, hence improving incomes and reducing wage gaps.
However, there are also challenges. Little trading has occurred under the Aagreement to date, due to a need to finalize administrative processes and negotiations on certain issues, including rules of origin4 . Trade liberalization brings with it outcomes that may negatively impact on women if not properly managed such as increased competition from foreign producers; complex preferential tariff regimes for small-scale cross-border traders; and expansion of export-focused enterprises that tend to discriminate women in terms of wages, salaries, employment conditions, skills upgrading and placement (UNCTAD, 2014)5 .
With trade liberalization, there may be an influx of cheap products, especially agriculture goods, which will affect the agriculture sectors that are mostly dominated by women in Africa (FAO, 2021)6 .In some instances, local firms are forced to mechanize and automate in order to compete with high-tech producers in the region which ultimately disadvantage women as they are usually discriminated against when they are not provided equal opportunities for skills upgrading to operate high-tech machinery (Moodley et al., 2019)7 .AfCFTA's focus on food security is still facilitating large-scale agro-business.
Moving forward, there is need to build what can be termed sustainable, gender responsive trade futures. There is need to make sure that women traders are well informed so that they can bring to the discussions an understanding of the potential impact of the AfCFTA in their sector (cross-border informal trade). Others (see Nadia Hasham) argued that inclusion primarily happens at the level of implementation and not at the level of the trade Aagreement itself. She has also rasied pointed out the importance of considering the practical challenges the Agreement raises particularly because of the diversity of the constituencies and the different forms of social organization across African countries. There is also need to ensure that trade instruments simply do not do 'lip service'8 . Member states also need to think deeply about how the benefits of the agreement can be distributed equally across various groups.
1 Zarrilli, S. and Linoci, M. (2020), "What future for women small-scale and informal cross-border
traders when borders close?" https://unctad.org/news/what-future-women-smallscale-and-informal-cross-border-traders-when-borders-close.
2 UNWomen, 2010. Unleashing the Potential of Women Informal Cross Border Traders to Transform Intra-African Trade
3https://africa.unwomen.org/sites/default/files/Field Office Africa/Attachments/Publications/2019/Opportunities for Women Entrepreneurs in the Context of the African Continental Free Trade Area AfCF.pdf
4 https://sgp.fas.org/crs/row/R47197.pdf
5 United Nations Conference on Trade and Development (UNCTAD) (2014). Virtual Institute
Teaching Material on Trade and Gender: Volume 1 – Unfolding the Links, New York and Geneva:
United Nations
6 Food and Agriculture Organization of the United Nations (FAO) (2021), Enabling Women to
Benefit More Equally from Agrifood Value Chains, Rome: FAO.
7 Moodley, L., Kuyoro, M., Holt, T., Leke, A., Madgavkar, A., Krishnan, M. and Akintayo, F. (2019),
The Power of Parity: Advancing Women's Equality in Africa, McKinsey Global Institute.
8 https://www.afronomicslaw.org/category/analysis/symposium-introduction-protocol-women-and-youth-trade-unpacking-inclusivity