Unrecorded cross-border trade between Kenya and Uganda : implications for food security

This study, based on border observations over a 12-month period, quantifies informal trade between Kenya and Uganda and examines in great detail how this trade is being carried out, who is involved, and what impact it has on food security. The study finds that unrecorded crossborder trade is significant and vital to the region"s economic development. Its also shows that when the forces of supply and demand are left to operate without interference, the gains in regional food security and efficiency of resource allocation are enormous. Thus, unofficial trade is a pointer to the comparative advantage existing in the respective countries and to the vital food security role the private sector can play in moving food commodities from one part of the region to another, often against huge barriers imposed by governments. The constraints to formal crossborder trading revealed by the study demonstrate the seriousness of the trade bottlenecks in the region and the urgency with which governments must address this problem. The study concludes that trade and food security are likely to be improved between Kenya and Uganda if: (1) domestic food policies are harmonized (which may require governments to forego some autonomy); (2) emergent small producers and traders are given access to adequate capital and new methods of risk management; and (3) trade constraints are removed (including poor trade information, poor infrastructure, licensing, tariffs, quotas, and administrative bottlenecks). Includes references.