Informal cross-border trade by MSMEs in East Africa: Opportunities, challenges, and gendered experiences at Cyanika, Mpondwe, and Vvura border areas

Ayoki, Milton (2025): Informal cross-border trade by MSMEs in East Africa: Opportunities, challenges, and gendered experiences at Cyanika, Mpondwe, and Vvura border areas.

Abstract

This paper examines the opportunities and challenges facing Micro, Small, and Medium Enterprises (MSMEs) engaged in informal cross-border trade (ICBT) at three strategic border locations: Cyanika (Rwanda-Uganda), Mpondwe (DRC-Uganda), and Vvura (DRC-Uganda). Using primary data from stakeholder consultations and secondary data from official trade statistics, we analyze trade flows, operating models, and the unique constraints confronting women traders, who constitute over 70% of the informal trading population. The study reveals that Mpondwe and Vvura collectively account for 33.2% of Uganda's informal export revenue ($188.6 million in 2023), with fish, agricultural products, and manufactured goods dominating trade flows. While the Simplified Trade Regime (STR) and One-Stop Border Posts (OSBPs) have improved formalization rates, significant challenges persist including customs compliance burdens, inadequate infrastructure, regulatory inconsistencies, and gender-based vulnerabilities. Our empirical analysis employs a structural gravity model to estimate trade facilitation effects, demonstrating that behind-the-border costs reduce trade volumes by 23-35%. We find that women traders face disproportionate barriers including sexual harassment, limited access to market information, and inadequate childcare facilities. The paper concludes with targeted policy recommendations for gender-responsive trade facilitation, including mobile testing laboratories, digital trade platforms, and strengthened cross-border trader associations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Informal Cross-Border Trade, MSMEs, Gender, Trade Facilitation, East African Community, Gravity Model
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F15 - Economic Integration; J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender ; Non-labor Discrimination; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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