Across Africa, women engage heavily in cross-border trade, representing a significant portion of the continent’s informal economy. Women traders work in everything from textiles, agricultural products, and household goods to electronics, making a substantial impact on local and national economies. However, while cross-border trade presents financial opportunities for these women, it is often fraught with challenges that restrict their full potential. Here, we delve into the economic contributions of African women in cross-border trade, the obstacles they face, and the steps needed to bolster their contributions to the continent’s economy.
1. The Economic Power of Women in Cross-Border Trade
Women make up approximately 70% of Africa’s informal cross-border traders, generating an estimated $18 billion annually in trade across regions such as West, East, and Southern Africa. This trade supports regional economies by supplying local markets, creating employment, and generating income for millions of households.
In countries like Uganda, women’s cross-border trade contributes over 30% of the total GDP from informal trade. Similarly, women traders in West Africa provide essential food supplies for major urban centers, from rice to vegetables, helping stabilize food prices and enhance food security. Furthermore, according to the United Nations Conference on Trade and Development (UNCTAD), increasing women’s trade participation by just 5% could boost Africa’s economic growth by $15 billion annually.
2. Barriers Faced by Women in Cross-Border Trade
Despite their critical role, African women in cross-border trade face a range of challenges that limit their potential:
- Legal and Regulatory Barriers: For small-scale traders, dealing with excessive documentation and high tariffs is a significant obstacle. According to the International Trade Centre, only about 25% of informal women traders have the necessary documentation, forcing many to rely on costly middlemen or face penalties.
- Harassment and Insecurity: A survey by the African Development Bank (AfDB) found that 85% of women cross-border traders experience harassment or extortion from border officials. This issue severely impacts their sense of security and increases the cost of doing business, as women are often forced to pay bribes to pass through borders.
- Limited Access to Finance: While women make up a large portion of cross-border traders, they have limited access to credit. According to the World Bank, only 36% of women in sub-Saharan Africa have a bank account compared to 48% of men, leaving them financially excluded from formal banking services that would allow for business growth.
- Poor Infrastructure and Lack of Market Access: With an estimated 40% of traded goods going to waste due to inadequate storage and transportation, infrastructure gaps are a costly burden. Many women lose significant income to product spoilage, especially those transporting perishable goods like fruits and vegetables.
3. The Economic Benefits of Supporting Women in Cross-Border Trade
Supporting women traders in cross-border operations could lead to massive economic gains for Africa. Research shows that narrowing gender gaps in trade could add up to $12 trillion to global GDP by 2025, with Africa receiving a significant share of that growth. This income increase would improve household welfare and contribute to poverty reduction.
Moreover, women’s trade boosts local economies by diversifying supply chains and providing affordable goods to communities. In East Africa, for example, women traders in Kenya and Uganda exchange coffee, fish, and vegetables across borders, directly contributing to local food security. An increase in women’s cross-border trade would also strengthen Africa’s position in regional markets, promoting self-sufficiency and resilience.
4. Initiatives Making a Difference for Women Traders
Several initiatives have been implemented to support women in cross-border trade:
- African Continental Free Trade Area (AfCFTA): Launched in 2021, AfCFTA aims to eliminate tariffs on 90% of goods traded within Africa, potentially boosting intra-African trade by over 50% by 2030. This agreement could increase the volume of cross-border trade conducted by women, giving them access to larger markets and removing high tariff costs.
- One-Stop Border Posts (OSBPs): In East Africa, OSBPs have simplified customs procedures and reduced wait times for traders. According to UN Women, these posts have helped reduce clearance times by over 60%, allowing women to trade more efficiently and safely across borders.
- Digital Finance Solutions: Mobile money platforms, such as Kenya’s M-Pesa, have revolutionized payment methods for women traders. Women who previously relied on cash now use mobile payments, reducing the risk of theft. In 2020 alone, over $20 billion was transacted through mobile money in sub-Saharan Africa, with a large share attributed to women traders.
5. Steps to Strengthen Women’s Role in Cross-Border Trade
For African women traders to maximize their potential, the following actions are crucial:
- Simplifying Trade Regulations: Governments should adopt policies tailored to support small-scale traders, such as reducing documentation and creating user-friendly platforms. UNCTAD estimates that simplifying customs regulations could save traders up to $40 billion annually across Africa.
- Ensuring Safety and Fair Treatment: Anti-harassment measures and corruption-free border security should be prioritized to protect women from exploitation. With a safer trading environment, more women will be encouraged to participate in cross-border trade, fostering further growth.
- Expanding Access to Finance: Financial institutions can introduce microfinance solutions and targeted loans for women in trade. Programs offering microloans of up to $5,000 would be highly beneficial, as 60% of women traders operate without bank accounts.
- Infrastructure Development: Investments in border infrastructure, including secure storage, reliable transportation, and efficient communication networks, are essential to reduce spoilage losses and improve efficiency.
6. Success Stories of Women in Cross-Border Trade
The stories of women who have found success in African cross-border trade illustrate the potential of this sector. For example, Nana Yaa, a trader from Ghana, began selling textiles between Côte d’Ivoire and Togo. With mobile money solutions, she expanded her network, and today, she generates over $10,000 per month. Similarly, in East Africa, Jane from Kenya has leveraged UN Women’s border support programs to expand her business across Uganda and Tanzania, doubling her income within two years.
7. A Vision for the Future
Empowering women in cross-border trade offers Africa a pathway toward inclusive economic growth and greater resilience. By addressing the challenges these women face and creating supportive structures, African governments can tap into an economic powerhouse that not only drives development but also uplifts communities.
Women traders represent a critical but under-recognized force in Africa’s economy. By unlocking their potential, African nations stand to make strides toward economic independence and integration, setting the stage for a brighter, more inclusive future.