Rwanda’s informal cross border exports continue to surge by 28.3 percent in the first half of 2016, despite trade hiccups since the beginning of 2016 before climaxing in July with Burundi closing its trade borders.
Central bank of Rwanda indicates in its half year results that the country’s informal cross border export receipts which accounts for 24.6% of its total exports amounted to U$ 66.2 million in the first half of 2016 from U$ 51.6 million in the same period of 2015.
Informal trade captures trade between borders that is normally done by communities around borders and may not be recorded among the country’s main trade statistics but is the trade driver along the borders.
Over 75 percent of this trade is done by women.
Democratic Republic of Congo accounts for 65.8% of Rwanda’s total informal cross border exports, while Uganda accounted for 26.9% and Tanzania, 7.3 percent.
Informal trade with Burundi is lagging behind with 0.03 percent.
The positive outlook in total informal export receipts John Rwangombwa, Governor of Central Bank says “is due to the high exportation of livestock as well as mobile phones to Uganda,” with Uganda taking over from Burundi.
In July this year, second vice president of Burundi, Joseph Butore warned that any local leader or police officer who will endorse export to Rwanda “will have problems”.
While this declaration was just a public announcement, Rwandan communities neighboring with Burundi told KT Press that trade with Burundi; the smallest economy in the region has been terribly declining since the last one year when a political turmoil started in Burundi.
“There is a year we have not freely been trading with Burundi. Gangs across the border snatch our food crops,” said Joseph Bitembo, a resident of Nyaruguru district.
Experts say the ban of trade by Burundi has so far boosted trade both in imports and exports between Rwanda and Uganda.
“When you go to see, what Burundi was exporting to Rwanda is replaced by Ugandan products,” said Davis Mukiza, a business analyst told KT Press on Sunday.
The country’s informal cross border trade continued to register a surplus of 25.4% increase in the first half of 2016 as result of good performance in its informal exports despite an increase of imports by 39.5% to U$ 14.8 million in the first half of 2016 from U$ 10.6 million in 2015.
“Our main trading partners in informal imports were Uganda, Burundi and Democratic Republic of Congo (DRC) which represent a share of 58.6%, 32.1% and 6.9% respectively,” said Thomas Kigabo, Economist with Central Bank.
The Survey conducted by KT Press at Gatuna border indicates that exports of fish, fruits, and eggs and other products from Uganda had increased since June this year.
Whilst a surge was recorded at Rwanda’s Rubavu border with DRC after the latter opened its market for more Rwanda products this month.
“We are taking this advantage of Congo to increase the cross border market our agro processed products and we believe this will increase export receipts,” said Christine Murebwayire, chairperson of the Agriculture chamber of Private sector Federation.
Central Bank statistics indicate that the main commodities traded were livestock, agriculture products, telecommunication equipment for exports and maize flour, fresh fish, beer, cement and other manufactured and recycled products.
On the other hand, Rwanda’s formal cross border exports to East Africa increased by 25.7% to U$ 83.48 million from U$ 66.4 million in the first half of 2015. The cross border formal exports represented 33.3% of total exports.
Whilst, formal cross border imports dropped by 7.4% in the first half of 2016 to U $ 186.3 million down from U $ 201.2 million in the same period in 2015, which resulted into formal cross border trade deficit reducing by 24.4 percent.