Small traders and micro businesses have in recent years drawn interest from authorities and even financial institutions. However, their counterparts in far-flung areas remain neglected and their growth is stunted.
This is even as communities living in marginalised areas and borderlands continue to feel the impact of climate change which has made it difficult for traditional economic activities such as agro-pastoralism which needs to be boosted by trade.
While a number of pastoralists consider themselves as traders, deepening their trade activities especially as their other sources of livelihood suffer because of weather patterns, they are limited by factors such as lack of financial inclusion and physical infrastructure that would enable them to thrive in this kind of trade.
This is despite being in a unique position to engage in cross-border trade.
Kristoffer Tangri the lead of programmes and partnerships at Africa Borderlands Center (ABC) at the United Nations Development Programme (UNDP), noted that while communities have found solutions to the many challenges that they face, access to finance and trade facilitators remain way out of reach.
“There are things that are absolutely missing and among these is access to electricity and finance. This is really important because if you want someone to start thinking more like a business and not just to grow food and rear cattle to survive, but actually start and grow a business, they need money.
"This can either be through investments or loans to grow and sustain a business,” he said, adding financial inclusion for borderland communities will be a priority area for his organisation.
“In the borderlands, they mostly do not have banks or even mobile money agents. They often have savings and loan associations or at best cooperatives but these too do not have access to finance. ABC’s major priority this year will be economic financial inclusion of borderland communities.”
In a December 2022 report by the centre, most people in the borderland communities traditionally identified themselves as either farmers or herders but are increasingly diversifying into traders as agro-pastoralism takes a beating from climate change.
According to the report, most respondents (60 per cent) identified farming as their primary occupation and just over two in five (44 per cent) said they were herders. But offered to select more than one option, one in five (18 per cent) also identified as traders.
With changes in the weather patterns and severe droughts becoming more frequent in recent years, both farmers and herders are increasingly venturing into trade for sustenance as crops fail and animals suffer a lack of water and pastures.
The report - Promise, Peril and Resilience: Voices of Agropastoralists in Africa’s Borderland Regions – was done after interviews in Eastern and Western Africa. In Eastern Africa, ABC talked to communities in the borderlands of Kenya, Uganda, Ethiopia and South Sudan.
“The biggest long-term threat for agro-pastoralists is climate change. When you talk to them, they say that the weather patterns are changing and this will likely make the situation for borderland communities worse unless we are significantly scaling up investments in these areas not just in water infrastructure but in access to finance, electricity, education and key services so that these communities can diversify,” said Tangri.
“The biggest opportunity for borderlands is cross-border trade. If you live right next to an international border, all you have to do is walk across and sell your product to a different country and maybe your product is what that country does not have.”
Cross-border trade is currently a big discussion across Africa as businesses look forward to the implementation of the Africa Continental Free Trade Area (ACFTA) which is set to deepen the trade and movement of people within Africa.
Tangri however notes that away from the continental wide trade, the small-scale trade across borders was also essential.
“What we are looking at is not so much about a truck going from Nairobi to Kampala but rather young women traders who are walking with small commodities across the borders. What they need is support to market places and value chains, for instance, milk, so that they can produce these things,” he said.
“In small-scale trade, most of the value stays within the community. A truck may roll through a border town and the driver might buy lunch but then the truck is gone. But if the community is trading with each other, the money stays within it.”
He also noted the need for the inclusion of women in such activities, noting that when they earn, their earnings tend to have a bigger impact on their households.
“Men on average earn twice as much as women. But women provide more to the financial stability of the households which makes the point that investing in women is not just important for women but the well-being of the family at large,” he said.
“Cross border informal small scale trade is primarily a role for women. If we want to empower more women economically, we should focus on this area by developing programmes that provide access to finance for women traders, and facilitate the formation of cooperatives for women traders.”
“This would include far more women in programmes that support cross border trade as well as make crossing borders safe for women by installing light, having amenities such as bathrooms and security.”