Informal traders want more support from governments

My posting on 24 November expressed the hope that authorities in Africa would begin to see informal trading in a more favourable light, and two recent news items have got me thinking about the topic again. The Mail & Guardian today highlighted a recent report which noted that 94% of street-traders interviewed in Johannesburg said that they had been harassed by the police. One of their principal complaints was that police failed to give receipts for goods they confiscated, thus making it difficult for traders to reclaim their merchandise. The M&G (‘Poor Traders Need Support’, 15 April 2008) also pointed to a forthcoming SADC conference on Poverty and Development in which it is hoped that governments will discuss ways of making the regulatory framework relating to cross-border trade fairer to informal traders.

The significance of cross-border informal trading is readily apparent to anyone in an African city, but these traders often face considerable difficulty in their interactions with state authorities, particularly when they’re passing through border controls. The M&G article quotes a Malawian trader – Herbert Tshitangai – who complains that

‘My problem is the high tax that is imposed on our goods. Most of the time you pay a quarter of the money that you make… The reason we pay so much tax is because the government does not recognise informal trading. We must have informal trading legalised. There should be clear tax on commodities — when you are being charged now, it depends on whom you meet at the border. That is our challenge.’

What’s apparent in both of these stories about informal trading is that traders are calling for more regulations not less – they’re pleading for regularised frameworks in which to operate. They want to know what taxes they will pay and what they can expect from the police and from border control officers. They want, in other words, a more defined policy framework in which to conduct their business. Let’s hope the SADC Conference goes some way to developing one.