Small-scale trade in the Great Lakes Region: Eight emerging effects of the COVID-19 pandemic

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Truck at Mpondwe border carrying goods belonging to a group of small-scale traders engaging in cluster trade during the COVID-19 pandemic.
Truck at Mpondwe border carrying goods belonging to a group of small-scale traders engaging in cluster trade during the COVID-19 pandemic. Photo: Eri Muhindo

In the border communities of the Great Lakes Region (GLR), small-scale cross border trade (SSCBT) is a source of income and livelihood. It provides access to goods and services that enable vulnerable households to increase their resilience against frequent shocks, including conflict, and escape extreme poverty.

The COVID-19 (coronavirus) pandemic has been a major shock to trade, resulting in restricted movement of people, goods and services across borders since March 2020. 

These restrictions have completely upended small-scale trade as it has been known for decades, and reversed some of the gains made through the World Bank-supported Great Lakes Trade Facilitation Project. The project, which has been under implementation in the Democratic Republic of Congo (DRC), Rwanda, Uganda and the Common Market for Eastern and Southern Africa since 2015, had registered significant impacts before the pandemic.

Taking evidence from the project, we’ve found eight emerging effects of the pandemic on small-scale trade. Understanding the effects of the pandemic in the region can inform discussions on policy response and the design of measures to lessen its effect and help protect the future of small-scale trade in the region. 

Here’s what we found:

  1. There has been a decrease in the value of goods traded through core trade infrastructure. In 2018 the value of goods traded by small traders between DRC and Uganda was estimated at $218.10 million. In December 2018, it had increased to about $279.47 million, increasing further to about $355.28 million in early 2020. However, with border restrictions due to the pandemic, there was a striking reduction of value of goods traded through core infrastructure of more than  50%, bringing the total to $146.49 million in October 2020.
  2. The average time to cross borders has increased. Before the pandemic, the time to cross borders had been reduced significantly. However, with the pandemic, the time to cross borders between DRC and Uganda, for example, has increased. In October 2020, it took about 18 minutes to cross the Kasindi-Mpondwe border, up from an average time of 16 minutes and 35 seconds in 2018. In 2018, crossing at Bunagana took only an average of 2 minutes and 39 seconds. Today, it takes an more than 7 minutes.
  3. The daily average of small traders crossing the border has decreased. For borders still operating but with restrictions, daily flows have slowed during the pandemic. At the Mahagi-Goli border between Uganda and DRC, daily flows dropped from 376 in January/February 2020, to 19 in June 2020. At the Kasindi-Mpondwe border, daily flows dropped to 28, down from 1,268.
  4. There has been a shift to non-controlled crossing points for small-scale trade. The restrictions on movement of people across the borders have also led small traders at borders like Bunagana and Kasindi/Mpondwe to shift from trading through formal crossing points to trading in no man’s land – or through  non-controlled crossing points. Closing the borders has not only contributed to the decrease in number of SSCBTs crossing the border, but may have had the unintended consequence of displacing trade through un-designated crossing points, which can lead to a spread of the pandemic.
  5. The pandemic has increased trading costs. The jeton (a day pass), previously issued to small traders at zero cost before the pandemic began, has now been replaced with a laissez passer. Costs are about $10.00 for traders crossing the borders between DRC and Rwanda, USh10,000 (about $2.75) for Ugandan small traders and $5.00 for DRC traders crossing borders between DRC and Uganda. For those trading at the borders between Uganda and DRC, there is a required $50 additional visa fee. COVID-19 tests for traders belonging to associations costs $5.00 at borders between DRC and Rwanda. At borders such as the Kasindi/Mpondwe between Uganda and DRC, the cost for the test with certificate is $50.00.
  6. There is a lack of COVID-19 testing centers. Some DRC-based small traders, particularly those using borders such as Kamanyola, find themselves needing to travel to the Rwandan side of Bugarama border to get tested for COVID-19 given the absence of test centers on the DRC side. The same applies at the borders of Ruzizi 1 and Goma.
  7. There is a lack of proper monitoring and evaluation tools. Collection of data for various project-related indicators and receiving real-time feedback from small-scale traders during the pandemic has been difficult and, in some cases, impossible given the absence of enumerators on the ground for safety reasons. This signals a need for countries to explore and develop robust innovative monitoring mechanism to enable them to collect data even with the absence of enumerators on the ground.
  8. The promotion of trading in clusters. One of the major impacts of the pandemic has been the promotion of small-scale trade in clusters or associations. This is when groups of SSCBTs have only a few of their members cross the border to sell or buy products on behalf of an association’s members. DRC recorded a total of 80 groups comprising 8,958 individuals, the majority of which are women, who are engaging in group trade and providing services such as transportation.

Like many sectors impacted by the pandemic world-wide, the pandemic has had profound effects on small-scale trading, and the Great Lakes Region has not been spared.  While many of the effects have increased costs for some of the most vulnerable groups in the world, the response in the region has also pointed to a possible sustainable, better organized future of small-scale trade.

Supporting policies that embrace trading in clusters, e-commerce and developing and adopting innovative techniques to capture data can contribute to a safe trading environment that does not require large movements of people at borders. Introducing testing centers, whether through use of tents, shipment containers or acquiring office space at borders where centers are lacking, can help reduce time and costs associated with traveling to the other side of the border to get tested.

Authors

Nyembezi Mvunga

Consultant, Finance Competitiveness and Innovation Practice Group

Charles Kunaka

Lead Private Sector Development Specialist

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