Health Crisis, Mobility Restrictions, and Group Trade: Evidence from Small-Scale Cross-Border Transactions in the Great Lakes Region

John C. Keyser, Charles Kunaka and Peter Walkenhorst

No 10589, Policy Research Working Paper Series from The World Bank

Abstract: The mobility restrictions and health measures imposed during the COVID-19 pandemic have had highly adverse impacts on small-scale cross-border trade. One coping strategy that traders have pursued is to engage in group trade, that is to combine their loads and cross the border using a larger cart or vehicle. This paper uses a cross-sectional data set derived from a survey of traders at the borders between the Democratic Republic of Congo and Burundi and Rwanda to assess the determinants of participation in group trade. The findings from the econometric analysis point to association membership, business registration, and motorized transport as being important factors for traders’ participation in new cooperative trade arrangements. Moreover, successful group traders have been in a position to increase their incomes by reaching new clients and obtaining higher prices. These results suggest that policy efforts to promote group trade could usefully focus on enhancing the integration of small-scale traders into regional supply chains. However, group trade has mainly benefitted the better-off segments of the trader population, so that any assistance projects to enhance group trade risk further increasing the income gap in border communities.

Date: 2023-10-11
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