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201010130734390.CROSS BORDER TRADER BULLETIN

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201010130734390.CROSS BORDER TRADER  BULLETIN Powered By Docstoc
					                              CROSS BORDER TRADER
                                Sponsored by European Union, the Cross Border Trade component of the REFORM programme.


Welcome to the bulletin “Cross Border            in COMESA. This is known as Cross Border             Cross border traders defined
Trader”                                          Trade REFORM project. It works with the              Cross Border Trade is trade with your
                                                 trade aspect. In particular it works on              neighbour. It involves both big and
This is the first issue of a regular bulletin    the assumption that greater freedom of               small traders. It involves, usually traders
about cross border traders, activities           trade will help food security.                       buying from one market and moving with
being implemented for them and their
                                                                                                      their goods to sell across the border in
impact in the southern and eastern Africa        Trade and Food Security
                                                                                                      another market.
region.                                          Areas of surplus food production in Africa
                                                 should have ready access to markets,
                                                                                                      CBT REFORM looks in particular at the
The bulletin will appear quarterly. The          especially those close by but across
                                                                                                      problems faced by small traders also
next bulletin will come out in June.             a border. A stable and uninterrupted
                                                                                                      referred to as informal traders. This is
                                                 ‘demand’ for food from neighbours will
CBT REFORM project                               result in farmers in surplus regions                 because they usually receive different
                                                 investing more to ensure long term                   treatment from the large traders
Food Security and Cross border Trade             supply.                                              at the borders and do not fill in the
The EU funded project is called REFORM.                                                               documentation that ‘formal’ traders
This stands for Regional Food Security           The goal of the project is therefore to              do. This informality leads to lack of
and Risk Management programme. It                increase the supply of locally produced              recognition and makes them subject to
is part of a larger EU project looking           food crossing borders. It is do this by              harassment and payment of duty that
at how to enable African states ensure           building the capacity of traders to lobby            they would not otherwise have to pay.
greater food security for their people.          governments through the formation of
The main part of the programme is based          Trader Associations (CBTA) in member                 These ‘small traders’ vary from the many
in IGAD in Djibouti and it looks at risk         states.                                              people crossing the border to relatives on
management and social protection. It is
                                                                                                      the other side with goods on their head
helping build up member states ability           At the same time, the project looks
                                                                                                      or with a bicycle, to people travelling
to address food security through being           to work with CBTA to Implement a
                                                                                                      with goods on a bus, or even pickup.
better prepared for disaster and having          Simplified Trade Regime (STR) developed
in place social safety nets, especially          by COMESA to make trade easier and less
addressing the problems of long term                                                                  Any cross border trader may join an
                                                 costly for the small trader.
malnutrition and hunger. Countries and                                                                association – big or small. The main
regions that are better prepared and      The project started in April 2009 and                       purpose of the association though is
done proper planning will reduce the risk finishes in June 2011. In this time we                      to help the small trader, especially at
of famine.                                aim to develop CBTA in most of the                          the border posts, to enjoy the same
                                          10 member states, aim to see the STR                        benefits of free trade enjoyed by bigger
A trade component in the project is based implemented in at least 8 countries.                        formalised traders.

                             Sponsored by European Union, the Cross Border Trade component of the REFORM programme.
BUILDING CBTA
                                                                                    Meanwhile, in Zambia CBTA members
                                                                                    based in Lusaka had acquired a
                                                                                    market place in a prime location.
                                                                                    The Regional CBTA focus shifted from
                                                                                    forming branches inside and outside
                                                                                    the country to purchasing a member-
                                                                                    owned market.
                                                                                    In Malawi, the development of the
                                                                                    CBTA moved slowly and membership
                                                                                    remained small. In recent months
                                                                                    Malawi has participated actively in
                                                                                    regional cross border meetings and
                                                                                    activities and the coming in of the
                                                                                    CBT REFORM has reinforced their
                                                                                    conviction to register their association.



T
       he idea of a cross border trader   The coming in of the CBT REFORM
       association was born in Zambia     project revealed a lot of things. For     Lessons drawn from these three
       in 1997. A regional body was       example the project learnt that the       nations have equipped CBT REFORM
established in Zambia with resident       current leadership of the CBTA in         project to prepare better on how to
traders representing more than 8          Zambia only comprised nationalities       help and strengthen the existing
nations. They established the Cross       of Zambia and foreigners resident         bodies while planning to support
Border Association IN COMESA and          there, with little or no touch of their   creation of new associations in the rest
SADC. It s main objective was to          respective countries. The initial idea    of the member states. The big lessons
lobby governments in COMESA to
                                          to use these foreigners to help open      include that traders themselves know
extend the benefits of the Free Trade
                                          branches in their countries was           best how to get organised and this
Area to even the small traders and
                                          great but has proved difficult and
to represent traders’ interests in the                                              ensures ownership of the association.
                                          unrealistic.
region. The FTA objective was partially                                             Secondly that all associations
achieved as the CBTA managed to get                                                 will require some kind of support
                                          In the past 10 years the example of
the endorsement of the council of                                                   administratively and financially to
                                          the Zambian based CBTA influenced
ministers which recommended that                                                    sustain their activities and thirdly that
                                          Zimbabwe and Malawi to initiate and
simplified procedures be introduced                                                 the association has to be founded on
                                          establish associations. In Zimbabwe,
for the section of traders.                                                         strategic objectives which are in the
                                          the economic problems the country
                                                                                    interest of its members otherwise
Ten years down the line the battle        forced people out of formal jobs
                                                                                    there is a risk members do not feel
is far from being won. On one part        into informal business, one of which
                                                                                    obliged to affiliate.
due to the poor organisation of           has been cross border business. The
the traders themselves thereby            many hurdles faced in conducting the
                                                                                    The CBT REFORM project is currently
compromising effective advocacy work      trade including harassment by border
                                                                                    focusing on creating new associations
and on the other hand due to delays       officials and lack of business permits
                                                                                    in Kenya, Uganda, Rwanda, Burundi,
in implementing the procedures by         in foreign countries triggered them to
                                                                                    DRC, Sudan and possibly Ethiopia.
governments.                              form an association.
FREE TRADE AND FOOD SECURITY?                                                        So why don’t we have free trade?


                                                                                     The problem was set out at the
                                                                                     beginning. If food prices begin to
                                                                                     rise in a country, closing the border
                                                                                     might help keep the price down. But,
                                                                                     in Zimbabwe, when the government
                                                                                     tried to keep maize cheap, it actually
                                                                                     resulted in maize going into short
                                                                                     supply as people smuggled maize out
                                                                                     of the country for hard currency.


                                                                                     In Uganda recently a poor harvest
                                                                                     in areas of the north and east in
                                                                                     July 2009 resulted in severe hunger
What people want is cheap food. What       rice production with much success,
                                                                                     in certain areas. The president
politicians promise is a stable price      but it has only been able to do this
                                                                                     of Uganda, His Excellency Yoweri
for food. They may even administer         with a heavy dose of protectionism.       Museveni even visited the area to
price subsidies to keep the population
                                           Uganda has developed new high yield       bring comfort. Opposition MPs called
happy. Cheap food though provides
                                           varieties but with a 75 percent tariff    for the closing of the border, because
little incentive for farmers to produce.
                                           on imported rice.*                        people were starving, while food
                                                                                     continued to be sold into Sudan.
How can we have cheap food and
                                           How can free trade help food security?
farmers having sufficient incentive
                                           Where borders are open and there is       But closing the border would not have
to produce? One way is to reduce
                                                                                     helped the starving people. They were
production cost for farmers by             no restriction on the movement of
                                                                                   starving not just because their harvest
subsidising inputs – especially            food, people will trade food from areas
                                                                                     failed but because they didn’t have
fertiliser. Subsidies for inputs used to   of relative surplus (where local prices
                                                                                     the means to buy food. What can help
be standard practices in the 1960s and     will be low) to areas of low production people in such a situation is a good
1970s, but after the 1980s subsidies       but high demand (where prices are       Disaster Management System and
were regarded as ‘price distorting’,       higher). The price ‘gradient’ will      social safety nets that provides social
leading to wastage. Not so in Asia,        encourage traders to respond to the     protection.
where the policy of subsidies persisted    market demand, buying food in the
in order to have cheap and plentiful                                                 REFORM and Food Security
                                           surplus areas and taking them to the
rice. Without cheap food it was not                                                  The REFORM project is trying to join
                                           deficit areas. Where trade is impeded
thought possible to urbanise and                                                     up best practices in Disaster Risk
                                           by high tariffs or export bans, then
industrialise.                                                                       Management, Social Protection and
                                           smuggling will take place if the
                                                                                     Free trade, so that governments do
                                           price incentive (or price gradient) is
Uganda is seen as an important                                                       not damage the market in trying to
regional exporter of food to Kenya,        sufficiently rewarding. The favourable
                                                                                     provide food in a disaster, but use the
Sudan and Rwanda. But not all              prices sought across the borders do       market assessing risk of disaster that
agriculture production is happening        not benefit or reach the farmer as they   lead to famine, so that governments
because of free trade! In fact the         are eaten up in the higher margins        are better prepared to meet these
reverse! Uganda has been pushing           required to trade.                        problems.
What is the Simplified Trade Regime?                                                  CBT REFORM
                                                                                      PROJECT at COMESA
                                                       Customs Document to
                                                                                      Secretariat, Lusaka,
                                                       declare their goods and fill
                                                                                      Zambia
                                                       in a Simplified Certificate
                                                       of Origin. There will be a
                                                       small charge for the forms
                                                                                      Who we are:
                                                       and a processing fee. It is
                                                       expected that the CBTA
                                                                                      Coordinator:                Peter Oldham
                                                       Trade Information Desk to
                                                                                      Private Sector Specialist: Daniel Njiwa
                                                       be set up at the border will
                                                                                      CBTA support:               John Chirwa
The simplified regime is designed to               be able to assist traders in
                                                                                      Finance and Accounts:       Eric Hakeeta
make it easier for the small trader to  completing the forms.
                                                                                      Admin Assistant: Jorine Malumani
take goods across the border and enjoy
the benefits of free trade conferred by When and where will it be                     Contact CBTdesk@comesa.int
the COMESA Free Trade Agreement.        implemented?
                                        The first countries to introduce the
                                                                                      What we hope to achieve:
In order to get duty free clearance,       STR will be Malawi and Zambia on
customs officers require to see a          March 19th, 2010, followed by Zambia
                                                                                      Cross Border Trader Associations are set
Certificate of Origin. This document is    and Zimbabwe. Watch the local
                                                                                      up and working independently in at
usually only obtainable in the capital     newspapers for details and contact
                                                                                      least 6 “fast track” countries – Zambia,
city, and must be endorsed by the          your local CBTA in March for details.
                                                                                      Zimbabwe, Malawi, Uganda, Rwanda and
Customs in the capital. For traders                                                   Kenya
buying small quantities, away from         Cross Border Trader Assistance and
the capital, they often do not have a      HELP DESK
                                                                                      That Help or Information Desks, run by
certificate of origin and therefore have   The CBTA hope to provide assistance
                                                                                      the CBTA, will exist at the main borders
to pay duty on goods that should be        to traders in filling out the documents
                                                                                      to help facilitate small traders.
duty free.                                 and dealing with any problems they
                                           have at the border. They will play a       That informal trade is largely formalised.
The Simplified Trade Regime is             critical role in ensuring the success of
designed for small consignments            this simplified trade regime.              For other countries – Congo, Ethiopia,
of $500 or less. Countries operating                                                  Burundi and Sudan, the process of
the STR have agreed a common list          Longer Term                                setting up CBTA will have begun.
of goods that each country agrees          Once the system is working properly
to allow to be imported duty free.         in the southern zone of COMESA it will     That the Simplified Trade Regime (STR) is
These goods are recognised as              be extended to the other participating     implemented in the fast track countries
being produced in the COMESA FTA           countries – Kenya, Uganda, Rwanda,         by early 2010 and the other 4 countries
region. This common list is available      Burundi, DR Congo, Sudan and               by mid 2010.
in Chamber of Commerce. When               Ethiopia.
countries implement, the list will be
                                                                                      That the STR results in more efficient
displayed in the customs area.             Interest is already shown by traders in    trade, and helps increase trade in food
                                           the SADC area on introducing an STR        and food products
Such traders may use the Simplified        there.
ELEPHANTS MET ON THE ROAD                                                        was a blessing in disguise because
                                                                                 such characters could not endure
by Augustine Tawanda                    trade secrets in the process. Inter      the sacrifice and perseverance to
                                        chapter meetings , policy advocacy       last the race and left. It is important
Advice on forming a CBTA from           and economic literacy workshops          particularly for new associations
Zimbabwe                                helped to overcome this.                 to consider issues of track-record,
                                                                                 demonstrated commitment/
During the process of developing       2         WOLVES IN SHEEPS SKINS
                                                                                 voluntarism and loyalty to the
the ZCBTA organization a number of
                                                                                 corporate cause when allocating
elephants were met on the road some 2.1 Politicians are the first group
                                                                                 responsibilities.
of the noteworthy are:                 that fit in this category because they
                                       quickly identify opinion leaders in
1         ATTITUDES                                                              3 COMPETITON FOR SPACE
                                       the movement and use all sorts of
                                       tactics to get the leaders to align
1.1       Government officials and     the association with their political      3.1 One of the prices such
business community had negative        parties. Here the association             organizations will have to pay for non
perceptions about the sector which     weathered numerous storms through         partisanship is that politicians are
manifested itself in frequent use      a clear and public policy of non-         quick to form similar institutions led
of derogatory terminology such as (    partisanship. In addition there is        by their surrogates hence associations
dealers, border jumpers, smugglers,    need for principled leadership            will have to learn to manage the
tax dodgers) There were times when which is strong enough to withstand           competition for space. ZCBTA survived
the media was awash with false         political pressure.                       by remaining focused on the agenda
information such as traders cause                                                of providing deliverables to the
the following: inflation, exchange     2.2 The second group encountered          constituency. In terms of it’s media
control distortions, currency          came from some NGOs who appeared          policy it avoided getting onto media
shortages and many other economic      to sympathise with the cause of the       for publicity’s sake and opted to get
ills. This onslaught made traders      down trodden but in extending a
                                                                                 in when only there is some positive
even more vulnerable to extortion by hand would twist their assistance to
                                                                                 development or concession which has
corrupt officials who would be quick   suit their agenda rather than the first
                                                                                 taken place.
to raise non-compliance card. ZCBTA priorities of the CBTA. The association
managed to change these attitudes relied on loose networking platforms
through resolute determination                                                   4 CRISIS OF EXPECTATIONS
                                       and also developed an activist
,constant lobbying and advocacy and approach when it came to joint
networking with like minded civil      programs and alliances.                   4.1 There will always be people who
society organizations                                                            join the association expecting it to
                                       2.3 The third group came from             solve all their problems tomorrow.
1.2       Xenophobia was also fueled   self-centered traders in leadership       They are quick and loud with their
by such misconceptions. This however who would hide their leadership             criticism if their expectations are not
affected the trader more than the      ambitions and self-centeredness by        met. ZCBTA now separates the client
institution                            portraying commitment particularly        type of member from a cadre type of
                                       in public or even volunteering to         member and is now putting in place
1.3       At one time traders were not carry out assignments but fail to         a leadership development program
keen to create a platform for sharing deliver. For ZCBTA the fact that           for the latter group and discourages
information under the mistaken         funding partners came late in the         mobilization approaches which create
belief that they would loose their     journey of building a movement            false impressions .
        CHRONOLOGY OF ACTIVITIES COVERED IN THE FIRST 8 MONTHS OF THE PROJECT
Date              CBTA                                        STR
April 2009        Project Team Starts work
June        –     Familiarization missions to member states by project team
October 2009      Member states visited: Malawi, Zimbabwe, Zambia, Sudan, Kenya, Ethiopia, Uganda,
                  Rwanda
July 2009         CBT REFORM Induction workshop
                  Focal points and Technical Advisory Committee members of the CBT REFORM component
                  introduced to the project objectives and review work programme for the year

                  CBTA Model development                     STR Development

August 2009       Assessment of Zimbabwe CBTA:               CBT REFORM facilitates the STR high level
                  conducted an assessment of the             meeting for Zambia, Malawi and Zimbabwe.
                  Zimbabwe CBTA institution as a             Common list of products agreed by countries and
                  possible model for replication in other    tentative STR launch dates set.
                  member      states.    Lessons    from
                  Zimbabwe are critical for further work
                  and support in the other member states.
                  Training     and      capacity   needs
                  assessment study for Zambia initiated:
                  A summary report on key training and
                  capacity gaps was delivered and
                  formed basis for strategy formulation
                  for Zambia CBTA including potential
                  support from the project
September         Zambia CBTA Strategy formulation
2009              workshop

                  Zambia CBTA strategy formulated,
                  training/capacity needs identified and
                  milestones for reviewing constitution
                  and conducting national elections
                  drawn. Task force set up to lead the
                  process.
                  TNA results presented and validated at
                  workshop
October       -   Baseline validation workshop
November
2009              CBT REFORM facilitated a workshop to validate the results of the baseline study.
                  Unfortunately the results were unacceptable and the workshop was considered a review
                  process. The contract for the study was cancelled due to unacceptable report. The project has
                  resolved to use the national training and needs assessment studies to collect additional data.
                  Zimbabwe          CBTA           Strategy STR High level meeting for eastern cluster
                  formulation workshop
                                                              CBT REFORM facilitated the STR high level
                  CBT funded the Zimbabwe CBTA meeting between Kenya, Sudan, Rwanda,
                  training/capacity    assessment       and Burundi, DRC, Zambia and Uganda. Common list
                  strategy formulation workshop. Key of products agreed and launch dates set.
                  issues and needs were highlighted and
                  shall form basis for receiving support
                  from CBT REFORM after signing of
                  an agreement.


December          Zambia CBTA signs an agreement             Produce STR templates
2009              with COMESA/CBT
                  Agreement for supporting CBTA in
                  Zambia finalized and signed by both
                  parties;
TIMETABLE FOR THE CBT REFORM
               ACTIVITY                  JAN FEB                                         MAR            APR           MAY            JUNE            JUL            AUG            SEPT
           CBTA Development
 MS 1 CBTA and Border TNA studies
 MS conduct CBT REFORM supported
 TNA workshops
 CBTA formed in Kenya, Uganda, DRC,
 Rwanda
 Regional CBTA policy forum
 CBTA training sessions in MS
 CBT REFORM planning phase II
 CBT Trade Information Desks established

             STR Implementation
  Malawi, Zambia and Zimbabwe launch STR
         2
  Eastern cluster launch STR
  STR training and publicity workshops in
  MS
  STR implementation review
  Food trade and food aid/security studies
                                                                            Project Governance
 FOCAL POINT PERSONS IN Member States                                                         TECHNICAL ADVISORY COMMITTEE (TAC)
 Frank Kamanga – Ministry of Agriculture, Malawi                                              Trade specialist
                                                                                              Geoffrey Osoro – COMESA Secretariat
 Boniface Kunda – Ministry of Trade, Zambia                                                   Monitoring EU funded projects
 Rex Mbilishi – Revenue Authority                                                             Peter Omondi – IRCC COMESA
 Joyce Ogundo – Ministry of Trade, Kenya                                                      Monitoring Food Security
                                                                                              Chansa Mushinge – FEWSNET Zambia
 Tayebwa James – Ministry of Trade, Rwanda                                                    Director Crop Production
                                                                                              Godfrey Ching’oma – Ministry of Agriculture Malawi
 Steve Kamukama – Ministry of Trade, Uganda                                                   Head of Lobby and Advocacy,
                                                                                              Janepher Sambaga – Chamber of Commerce, Uganda
 Mutasim Makawi – Ministry of Trade, Sudan                                                    Deputy Commissioner, Customs
                                                                                              Julius Musyoki – Kenya Revenue Authority
 Arthur Nyamukapa – Ministry of Agriculture,                                                  Benard Mkumu – Immigration, DRC
 Zimbabwe
 Haimanot Tibebu – Ministry of Trade, Ethiopia                                                Mr. Elliot Kabinda – CBTA Zambia
 Eugenie Salebongo Basoy - Ministry of Trade, DRC                                             Secretary General
                                                                                              Augustine Tawanda - CBTA Zimbabwe
 Athanase Nsabumwami – Ministry of Commerce, Burundi                                          Bernard Sikunyongana
                                                                                              CBTA Zambia

NEXT ISSUE:               JUNE 2010

CALL FOR ARTICLES AND LETTERS
For the next issue we need more articles on cross border traders and people’s experience. Please send submissions in writing by e-mail to cbtdesk@comesa.int or send to
CBT REFORM,
COMESA secretariat,
Ben Bella Road
PO BOX 30051
Lusaka, ZAMBIA

Articles should be submitted by May 1st 2010. We are looking also for articles on women and youth in trade, trade success stories in the region, interesting stories from the newspapers on
trade in your country.

				
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