The effect of informal cross border trade on people’s/household welfare in Busia District

Abstract

This study seeks to explore the effect of informal cross border trade on the welfare of small-scale traders. The Objectives were to investigate the effect of food security before a person engaging in ICBT and the current income, find out the relationship between current income of an individual during participation of ICBT and his/her education level and also to find out the effect of employment on the current income of an individual engaged in ICBT. The research questions used to accomplish the purpose of this study focused on finding out the effect of informal cross border trade on people’ welfare. This study was qualitative and quantitative in design. The simple random sampling technique and purposive sampling were both employed to draw the study sample, which comprised of ninety-six informal cross border traders operating along Uganda’s border with Kenya in Busia district. Major findings of the study indicated a significant relationship between education (P-value< 0.05), employment (P-value< 0.05) and current income of respondents engaging in ICBT and an insignificant relationship between food security (P-value> 0.05) and current income of respondents. Investigations indicate that a great number of women engage in ICBT than their fellow counter parts (males) of whom are between the age of 30-39 years with a secondary education qualification. Therefore, the study concluded that informal cross border trade is a source of employment to some people who were retrenched, educated women have obtained both formal and informal trading avenues that earn them an income, which they use to support their families and educating their children, loss of agricultural productivity and food insecurity may occur when potentially polluting industries are located in the vicinity of rural areas. The policy recommends that regional states should initiate joint trade policies that target players in informal trade in order to enhance their income and product competitiveness, the Government of Uganda should introduce a legal framework that compels informal traders to declare their merchandise at the time of crossing whether on bicycle or foot. Simplified procedures and documents similar to COMESA STR should be implemented across the region after sensitization of traders.