Informal cross-border trade by MSMEs in East Africa: Opportunities, challenges, and gendered experiences at Cyanika, Mpondwe, and Vvura border areas

Milton Ayoki

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the opportunities and challenges facing Micro, Small, and Medium Enterprises (MSMEs) engaged in informal cross-border trade (ICBT) at three strategic border locations: Cyanika (Rwanda-Uganda), Mpondwe (DRC-Uganda), and Vvura (DRC-Uganda). Using primary data from stakeholder consultations and secondary data from official trade statistics, we analyze trade flows, operating models, and the unique constraints confronting women traders, who constitute over 70% of the informal trading population. The study reveals that Mpondwe and Vvura collectively account for 33.2% of Uganda's informal export revenue ($188.6 million in 2023), with fish, agricultural products, and manufactured goods dominating trade flows. While the Simplified Trade Regime (STR) and One-Stop Border Posts (OSBPs) have improved formalization rates, significant challenges persist including customs compliance burdens, inadequate infrastructure, regulatory inconsistencies, and gender-based vulnerabilities. Our empirical analysis employs a structural gravity model to estimate trade facilitation effects, demonstrating that behind-the-border costs reduce trade volumes by 23-35%. We find that women traders face disproportionate barriers including sexual harassment, limited access to market information, and inadequate childcare facilities. The paper concludes with targeted policy recommendations for gender-responsive trade facilitation, including mobile testing laboratories, digital trade platforms, and strengthened cross-border trader associations.

Keywords: Informal Cross-Border Trade; MSMEs; Gender; Trade Facilitation; East African Community; Gravity Model (search for similar items in EconPapers)
JEL-codes: F14 F15 J16 L26 O17 O55 (search for similar items in EconPapers)
Date: 2025-12-12
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