IIDEA Partner DMT tested solutions to overcome unprofitable trade targeting women trader cooperatives as well as the women traders’ transactions through the Women Cross Border Traders’ Cooperatives Accelerator Project. Now we can take a closer look at the lessons learnt and best practices.
Great strides have been made in facilitating trade in the East African Community (EAC). For instance, as early as 2014 the EAC had identified 370 products that were eligible for clearance through the simplified certificate of origin, under the Simplified Trade Regime. This number is higher today. TradeMark East Africa reports an average decline of 50% in the time it takes to cross borders. Uganda’s Minister of State for Cooperatives says that transporting goods from the Port of Mombasa to Kampala is down from three weeks to three days.
As we celebrate these wins and ponder inclusive and sustainable participation and empowerment of women in trade, what is being done to confirm that we are supporting profitable trade?
Inspired by the trading challenges discovered during the successful completion of the TradeMark East Africa-funded 2017 Women-in-Trade project implemented by Uganda Women Entrepreneurs Association Ltd. (UWEAL), DMT Consultants Ltd. examined the difference between purchase and sale prices of selected items as reported by the Chairpersons of the participating partner associations on a given date. The exercise revealed that some transactions were being conducted at a loss to the women traders. However, a lack of record-keeping hid the losses incurred from the women traders.
The Women Cross Border Traders’ Cooperatives Accelerator six-month project was designed and implemented in November 2018 – April 2019 by DMT Consultants Ltd. It was funded by GIZ-EAC under the Incubator for Integration and Development in East Africa (IIDEA). The project was designed to test a potential solution to overcome unprofitable trade. The initiative targeted women trader cooperatives as well as the women traders’ transaction activities.
Why include the cooperatives in an effort to help women conduct profitable trade?
Because the cooperatives provide a local structure that can continue the work begun during the project even after the project completion date. Furthermore, if the women traders perceive that the cooperatives are delivering value, they will readily pay for services and meet any financial obligations to the cooperative. The project participating organizations were
- The Busia Women Cross-Border Traders’ (BWCBT) Cooperative Uganda
- The Busia Cross Border Women Traders Savings and Credit Cooperative Society Ltd., Kenya (BCBWT SACCO)
- The Tugunjuke Community Initiative (TCI) in Owino Market, Kampala
The participants had several beliefs in common that are obstacles to profitable trade:
a) If I have money in my pocket, I should use it to buy stock
b) As long as I can sell the product for more than I paid to purchase it, I am making a profit and
c) If I don’t have a Tax Identification Number I must pay someone who does to clear my goods for me and
d) We can only grow our businesses if someone donates “capital.”
Also the aversion to record-keeping was identified as a struggle and finally, the overall belief that one must be “paid” to participate in any kind of business support programme.
After the participation in this project, the cooperatives successfully increased their compliance levels with cooperatives’ administrative and statutory requirements. Depending on their product cluster, women cross border traders who previously earned Uganda Shilling 1 or less in pretax profits for every shilling spent as solo traders, reported increased pre-tax profits.
Find the full paper by Dorothy M Tuma (DMT Consultants) here: