Hustle at the Border for Zimbabwean Traders
On top of missed income opportunities caused by the freeze of productive activities, many women traders in Zimbabwe suffered economic losses from goods that have remained unsold and, in many cases, gone to waste because of their perishable nature.
This article originally appeared at COVID HQ Africa and is re-posted here with permission.
For millions of Zimbabweans, cross-border trade is a source of livelihood due to the scarcity of formal jobs. And women constitute the majority of the cross-border traders who earn a living from buying and selling commodities across the border.
Along African borders, the livelihoods of entire communities depend on trading activities carried out by small-scale traders, most of which are unregistered. Informal cross-border trade has been a major characteristic of the African economic and social landscape, representing up to 40 percent of regional trade.
In Zimbabwe, these trading activities contribute 30 percent of employment as well as part of the backbone of the informal sector. But the closure of borders by Zimbabwe and other regional countries in a bid to stop the spread of the virus, dealt a blow to Sheilla Gwenzi who has sustained her family through cross-border trading.
“This has been my source of income. For 15 years, I have been a cross-border trader and managed to send my children to school. I have a house in Budiriro, Harare, through buying and selling groceries and other home appliances for people. But the past nine months have been a challenge, I had no reliable source of income,” Gwenzi says.
“I had to look for ways to ensure my family survives.”
Because of the flexibility it affords, the small start-up capital it requires, and the earning opportunities it offers in border areas where no other alternative is available, women make up the largest share of informal traders, representing 70-80 percent of the total in some African countries.
“I had to look for ways to ensure my family survives. We used the Limpopo River and other means to remain alive throughout the nine months of the lockdown,” she says. As borders closed, restrictions on freedom of movement took a heavy toll on those who earned a living by making regular trips between South Africa and Zimbabwe mainly.
On top of missed income opportunities caused by the freeze of productive activities, many women traders suffered economic losses from goods that have remained unsold and, in many cases, gone to waste because of their perishable nature.
“I buy fresh produce from South Africa along with other consumables and many people were left with less money to spend on such commodities when the lockdown was announced. I lost hundreds of dollars due to the perishability of some of the goods that I had,” she said.
Before the lockdown, she says, she used to earn an average of USD 700 per month, which was enough to feed her four children and send them to school.
As the economic prospects worsen and purchasing power drops, women traders are forced to use their capital for survival. Gwenzi was not spared from this. “Eventually, this eroded my capacity to recover when the border eventually reopened on December 1. Yes, I tried to stay afloat but it is no longer the same,” Gwenzi said.
Informal cross-border trade flows of staples and other agricultural products play a critical role in guaranteeing food security, especially in remote villages where the population relied more on food items supplied through informal channels than on official distribution.
As a result, severe shortages of essential goods coming from across the border, combined with the consequences of stockpiling by those who could afford it, risk to seriously hamper food security in border communities and to intensify poverty.
Micro, small, and medium-sized enterprises, the backbone of developing countries’ economies, are experiencing some of the most severe effects of the economic slow-down. This is particularly the case of small informal businesses, which usually lack access to social protection. But as countries prepared to address the COVID-19 crisis, the response mechanisms did not prioritize business activities operating in the informal sector and cross border traders, says Mollen Magume, another cross-border trader.
Before venturing into cross-border trading three years ago, Magume was an accounts clerk on a yearly renewable contract for South Airways-Zimbabwe office and is a graduate from Chinhoyi University of Technology. She was retrenched when the airline downsized its workforce and used her savings to fund the cross-boarder business.
“What is needed is ensuring that we are included in the financial system now more than ever so that we can have access to finance for the survival of our businesses.”
“There are ways in which this pandemic could be turned into an opportunity for us, the vulnerable. This requires governments to acknowledge, on one side, the enormous contributions that we make as cross-border traders in employment creation and to the overall economy,” Magume said.
“What is needed is ensuring that we are included in the financial system now more than ever so that we can have access to finance for the survival of our businesses. We lost opportunities and revenue. This may include introducing preferential options for small-scale and informal traders, such as flexible repayment terms or interest-free loans. Digital tools such as mobile money to provide effective solutions to store and transact money and, in some instances, to access digital credit services without the need of a bank account,” she said.
“Because of COVID-19, I had to change the way of doing business. I was now selling my goods on WhatsApp through groups and made orders abroad the same way. Most of the goods I was selling came by air from China and some truck drivers who were allowed to cross through the Beitbridge Border Post. I would identify the goods online and make payments online,” she said.
With digital trading now more prevalent due to travel restrictions, Magume said the government should train cross-border traders to be able to make orders online and market their goods online without risking contracting COVID-19.
“I think it is time to develop entrepreneurial skills… It is time to explore opportunities for diversification, establish stronger linkages with local value chains or adopt digital solutions to redress business activities.”
Improving Simplified Trade Regimes to facilitate small-scale cross-border trade could be adapted to better respond to the specific needs of informal traders, says Beauty Murehwa. She is currently working for the Small to Medium Enterprises Development Corporation, a state owned entity which helps finance SMEs. She is a student of marketing at Catholic University of Zimbabwe and uses proceeds from cross-border trade to fund her academic advancement. She also has a higher national diploma in marketing from Harare Polytechnic.
“This may include,” Murehwa says, “waiving the certificate of origins, relaxing requirements for export/import permits and sanitary and phytosanitary certification – for instance on trade of essential goods – or expanding the lists of goods eligible for STR treatment. Government must expand the social safety net and introduce emergency relief packages or social protection measures to support informal workers, particularly us women who are affected by this unprecedented situation. These could take the form of social cash transfers, temporary living allowance subsidies, emergency minimum wages, food vouchers, or energy and housing subsidies.”
Murehwa argues, “For small-scale cross-border trade to have a more direct impact on poor households and to promote women’s economic empowerment, efforts to support and develop it need to be increased and designed in a targeted way. Tackling the challenges related to informal cross-border trade and creating a gender-sensitive border environment can go a long way in helping reduce the extreme poverty still faced by women in the border communities of most countries in the country.”
This article originally appeared at COVID HQ Africa and is re-posted here with permission. The views and opinions are solely those of the author(s) and do not purport to reflect the opinions or views of COVID-19 Africa Watch or any affiliated organization. The original article is available here.
For more on COVID-19’s impacts on Zimbabwean cross-border traders, see “The COVID-19 Pandemic is Killing Zimbabwe’s Once-thriving Cross-border Trading Networks.”