Academic journal article International Journal of Management and Marketing Research

Characterization of Informal Cross-Border Traders across Selected Botswana Borders

Academic journal article International Journal of Management and Marketing Research

Characterization of Informal Cross-Border Traders across Selected Botswana Borders

Article excerpt

ABSTRACT

This study was cross-sectional and used the quantitative (survey methods) and qualitative methods (Focus Group Discussion and Key Informant Interviews) to characterize the informal cross-border traders drawn from four major activity border posts in the northern and southern parts of Botswana. The systematic random sampling and snow ball techniques were used in identifying the 520 informal cross-border traders who participated in the study. The study analysed the demographic characteristics of the traders, main commodities they traded on, the sources and amount of start-up income, reasons for participating in informal cross-border trade (ICBT), the extent of profit generated from the trade, major constraints faced by the traders, and factors that significantly predicted profit generated from ICBT. The study recommends that government should recognize ICBT and provide enabling facilities and infrastructure to ease delays at the border posts, minimize stiff trade completions and ease transportation for ICB traders. A nationwide study covering all the 21 border posts needs to be embarked on to provide data necessary for monitoring the informal cross border trade in Botswana.

JEL: F13, F16

KEYWORDS: ICBT, Qualitative, Quantitative, Multiple Regression, Cross-Sectional, Agricultural Products And Output, Industrial Goods, Characterization.

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Informal cross-border trade (ICBT) has been defined as a form of trade that is usually carried out by small businesses and unrecorded in official statistics; trade in legitimately produced goods and services, which escape the regulatory framework set by the government, and as such avoiding certain tax and regulatory burdens (Njiwa, 2013; Afrika and Ajumbo, 2012).

Statistics show that informal cross border trade contributes 30-40% of intra-Southern African Development Community (SADC) trade. An ILO study conducted in 2004 notes that trade is the most important source of employment among self employed women of sub-Saharan Africa, providing 60% of non-agricultural self employment (Wanjiku, 2011; Motsetsa, 2011; CSO, 2009).

Although some information about informal cross-border trade exists in the Southern African Development Community (SADC), of which Botswana is a member (Mijere, 2009; Njiwa, 2013;Njiwa et. 2010; Peberdy, 2000; Wanjku et al 2011), there has been no empirical study on the informal cross-border trade in Botswana. Appropriate information on who they are, the characteristics of these traders, the extent of their involvement in the trade, products traded on, factors that influence participation of men, women and youths in ICBT, profitability of the trade and their challenges, the number of informal cross-border traders, geographical location, funding sources and countries of destination, among other indicators are hardly available Yet these information are very crucial to the country to determine the contribution of this trade to the economy of Botswana. Specifically, for ICBT to encourage entrepreneurial activity and regional trade, and contribute to greater food security and enhance income earnings and employment opportunities for the vast population of Botswana, an understanding of the present operations of the trade is very vital.

This paper, which is extracted from the result of a study on Informal Cross-border Trade between Botswana and its neighbouring countries (Ama and Mangadi, 2012), and carried out between January and September 2012, has been able to fill this gap in information on the informal cross-border trade activities at selected borders in Botswana. This information, together with a methodology and analytical procedure adopted in the study could enhance a nationwide study that will provide holistic information for monitoring the informal cross-border trade across the country.

The remaining part of this paper is organized as follows: The next section examines the related literature and develops the scope of this research study. …

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