A systematic review of informal cross-border trade in African economies towards vision 2030

Abstract

Informal cross-border trade (ICBT) is spreading across Africa driven by high poverty levels and influenced by factors such as climate change, political instability and economic marginalisation among others. This desktop-based review synthesised the existing literature to explore the dynamics of ICBT in Africa. Findings reveal that while formal trade remains limited, ICBT thrives due to weak economic integration frameworks like SADC, ECOWAS and COMESA which often overlook informal trade. Biased policy reforms, retrenchments and exclusion from formal markets further exacerbate informality. ICBT significantly contributes to Africa’s GDP, particularly as women who represent over 70% of participants engage in this trade due to marginalisation from the formal economy. Although both men and women participate in ICBT, the later tend to face serious vulnerabilities, including health risks such as HIV/AIDS, sexual exploitation and harassment often as a means of evading taxes or gaining access to services. The trade includes a wide array of goods both legal and illicit facilitated by corruption and inadequate border infrastructure. Despite its challenges, ICBT remains a vital livelihood strategy for many Africans. Rather than seeking to eliminate it, the article advocates for the development of a framework to formalise, regulate and safeguard ICBT while aligning it with sustainable development goals. Enhancing border infrastructure, gender-sensitive policies and institutional support can help maximise ICBT’s benefits while mitigating associated risks, fostering inclusive and sustainable economic growth in Africa.