Cross-border informal trade jumps more than 500% – data underrated

By Freeman Ngulu.

[email protected]

05 December 2017 – A study by the Namibia Statistics Agency (NSA) released late last year shows high volumes of informal cross border trade between Namibia and neighbouring countries through six surveyed border posts.

Informal imports from neighbouring countries such as Angola, South Africa and Zambia, were estimated at N$1.384 million, representing an increase of 535% from N$218, 000 recorded in 2015.

The trade balance between Namibia, Angola and Zambia, as per official custom data results from the survey show that there is a high volume of low-key informal cross border trade, in particular Namibian exports to Angola and to Zambia that are not captured by Customs and do not form part of official statistics. This in turn leads to the inflation of the overall trade balance.

According to the study, Oshikango was the leading entry point for imports in 2015 accounting for a share of 38 % of the informal import bill. Oshikango is also a major exit border post for informal exports together with Wenela and Omahenene with a combined share of 95% of the total exports.

The Statistician General, Alex Shimuafeni said in the report detailing the findings that strengthening the Informal Cross Border Trade (ICBT) data collection at key border points is vital to gauge their contribution to the economy which he said requires the expansion of the survey coverage by including more entry and exit points such as Katwitwi, Ngoma, Kasane and Buitepos.

Cross border transactions below the N$5,000 threshold are not captured or required by Customs Authorities. “However, when aggregated, these small transactions become significant due to their frequent occurrence. If properly harnessed, ICBT have the potential to support Namibia’s poverty alleviation efforts,” Shimuafeni said.

Meanwhile, the study shows that Informal exports to all trading partners increased except for Angola which registered a 10 % decrease in 2015. However, Angola maintained its position as the main export destination for Namibia. Similarly, Angola occupied the first position as Namibia’s main source of informal imports.

The four border posts in the North and North-Eastern parts of the country recorded favourable trade balances while the remaining two border posts in the Southern parts of the country recorded deficits.

The study also showed that informal trade between Namibia and Zambia only takes place at Wenela border post. However, there still exists informal trade between Namibia and Angola through Oshikango, Omahenene and Calai, while informal trade between Namibia and South Africa is rife through Ariamsvlei and Noordoewer.

Furthermore, the decline of informal exports in 2015, due to a significant decline in exports to Angola were estimated at N$11.9 million, representing a 2% decline from N$12.3 million recorded in 2014. The leading informal export commodities include fish, building materials, toiletries, vehicle parts and bicycles; and clothing and jewellery.

According to the study, alcoholic beverages, vegetables, maize and mahangu meal; clothing and jewellery; non-alcoholic beverages, rice and pasta, electronics and electrical appliances dominated the list of informal imports to Namibia.

According to the NSA findings, it recommends the extension of operating hours for enumerators by one hour from 8:00 A.M to 6:00P.M and allow the data collected from the survey to be integrated to form part of the formal international merchandise trade statistics.

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