Small-scale trade in agricultural goods (cereals, pulses, vegetables, fruit, cooking oil, etc.) between the province of North Kivu in the Democratic Republic of Congo (DRC) and Rwanda’s West Province is very significant. ‘Small-scale cross-border trade’ is defined as commercial activity generating daily transactional revenues of less than US$100 by trader.
This commerce provides at least 22,000 small-scale traders and their dependents on both sides of the border with a survival economy. It also provides opportunities for farmers, pastoralists, wholesalers and warehouse employees and – arguably – even border officials on the Congolese side of the border. Small-scale trade generates important revenues for both provinces and the individual states. It furnishes visible evidence of the economic interdependence between the cities of Goma and Gisenyi, and their surrounding regions. Reinforcing trust between small-scale traders in DRC and Rwanda, and promoting their economic activity would be important steps toward consolidating peace in the region.
This study is based on field research conducted in Goma in November 2009, and focus-group discussions with Congolese and Rwandan traders. The final report was informed by targeted interviews with Congolese and Rwandan authorities, customs officers and services, private sector actors and the Economic Community of the Great Lakes Countries in January and February 2010. The global objective of the study is ‘to analyse the dynamics of small-scale cross-border trade in agricultural goods as an economy of survival in order to understand what impact its improvement would have on neighbourly relations, peace and security between DRC and Rwanda’.
The objectives of the study are:
- To identify the goods traded between Rwanda and DRC, their volumes and economic importance in terms of tariffs collected, the number of people employed in the activity, their income, and its importance vis-à-vis other sources of income;
- To identify and analyse factors inhibiting the trade, such as access to capital, access to markets, insecurity, etc.;
- To identify and analyse traders’ shared interests in order to ascertain the opportunities and risks of interventions that would promote dialogue and the re-establishment of trust between Congolese and Rwandan women traders and;
- To produce a document as a basis for joint advocacy by women traders for better collaboration at all levels, for peaceful cohabitation and economic development in the border region.
The following observations emerged from the research findings:
- The small-scale cross-border trade in agricultural goods is the principal source of income for a large number of residents in Goma and Gisenyi. For 48 percent of traders of both nationalities in the survey, small-scale trade is their principal means of subsistence. Taking the population of both border cities into account, at least 22,000 people live from the trade, the majority of them women.1
- There is a strong commercial interdependence between the two cities. This interdependence is demonstrated by the volume and variety of agricultural goods consumed in the two cities that 1 Total number of people practicing this trade every day, according to the survey undertaken for this study (3,640 people), multiplied by six members per household = 21,840; rounded up to 22,000 come from across the border. In times of insecurity in Eastern DRC, the flow of goods from the North Kivu province in Rwanda is blocked and prices rise sharply.
- The lack of systemic consistency in taxation in Rwanda and DRC creates serious difficulties for small-scale business. In Rwanda, the ‘unique service’ system is in force. Export taxes are set at zero, but tariffs on imported agricultural goods are steep. In DRC, there are numerous custom services, only some of which are authorised to work at the border and/or collect taxes.
At the Goma border crossing, 90 percent of traders pay ‘informal’ tariffs to several state actors, often accompanied by physical harassment.
- Rwandan traders have a weaker capital base than their Congolese counterparts. The capital3 used by traders originates mainly from household resources (69 percent) or money loaned by other family members or friends (22 percent). The Rwandan small-scale trader has an average start-up capital as low as US$13.90, compared to the Congolese trader’s US$19.50, irrespective of gender.
- Competition and distrust characterise relations between women traders from both cities. Congolese women traders are vexed by the competition created by the Rwandan women’s practice of itinerant trading. Rwandan women claim they are ‘chased from the market’ by their Congolese competitors, that they do not have their own markets, and that they are harassed by Congolese customs services when crossing the border and by other persons in Goma. However, the study shows that women traders from both countries have interests in common, including the creation of a one-stop border point, the reduction of harassment at the border and the establishment of dialogue to seek solutions to their mutual problems.
- The authorities of North Kivu and West provinces should establish a permanent, tax-free border market for agricultural produce sold by small-scale Rwandan and Congolese traders, and organise regular border fairs where goods from both sides can be displayed for sale.
- The DRC and Rwandan authorities should liberalise the small-scale trade in agricultural goods by implementing the Common Market for Eastern and Southern Africa (COMESA) ‘Simplified Commerce Regime’ (RECOS), and the Economic Community of the Great Lakes Community (ECGLC) ‘Protocol for the Liberalisation of the Trade in Basic Goods’.
- Goma and Gisenyi municipal authorities must reinforce the partnership between them through regular dialogues aimed at establishing strategies and agreements that facilitate cross-border transactions, including the small-scale trade in agricultural goods.
- Rwanda and DRC should standardise cross-border tariffs and open a one-stop border point on the Goma crossing, including associated improvements such as training and paying professional staff, computerising trans-border movements, and other streamlining measures, etc.
- Over the long term, DRC and Rwanda should establish a one-stop border post allowing for joint customs inspection by Congolese and Rwandan officials, reducing delays and informal levies on traders.
- Goma authorities should enforce a zero-tolerance policy against the harassment of traders by state officials and semi-official actors, such as the ‘Maibobo’, ‘Rasta’ and ‘Kajoriti’.
- Associations of Congolese and Rwandan traders, linked by common lines of business, should be encouraged with a view to harmonising their activities, gaining joint access to credit and seeking solutions to existing problems.
- The re-establishment of partnerships between small-scale traders’ associations from Gisenyi and Goma in order to promote direct sales.