Unrecorded cross-border trade between Tanzania and her neighbors : implications for food security

Specifically, the study provides: (1) an overall analysis of how informal traders overcome the major constraints facing formal traders, such as mutually acceptable exchange rates, transportation, information, financing, means of balancing trade, and the costs and benefits of ICBT; (2) estimates of the magnitude of unrecorded trade, highlighting the most important commodities (and categories of commodities) being traded and the trade patterns; (3) a comparative analysis of recorded and unofficial (unrecorded) trade volumes, highlighting the factors determining the disparity between the two; (4) an overall assessment of the impact of informal cross-border trade on national food security and the effects of cross-border trade liberalization; and (5) recommendations to enhance trade between Tanzania and its neighbors. ICBT activities between Tanzania and its neighbors involved exchange of large volumes of commodities in four categories: agricultural foods, industrial manufactures, and forest and water resources. Tanzania"s exports comprised mainly agricultural food commodities, fish, timber, and charcoal. However, the country"s imports derived from value-added services from the neighbors" industrial sectors, or re-exports from a third country. Most of the traded commodities were both imported and exported. The overall ICBT trade balance was in Tanzania"s favor by over $74 million, being positive with respect to Uganda, the Democratic Republic of Congo, and Mozambique, and negative with respect to Kenya, Zambia, and Malawi. During the same period (1995), Tanzania"s official regional trade amounted to $204 million, or about 73% of the estimated ICBT of $278 million. Overall, ICBT accounted for 58% percent of Tanzania"s total trade with her regional neighbors. Policy implications on GDP, government revenue, and regional food security are detailed in conclusion. Includes references.