SOUTHERN AFRICA: Malawi gets bulk of informal cross-border food trade

[ This report does not necessarily reflect the views of the United Nations]

JOHANNESBURG, 25 Oct 2004 (IRIN) - The first report on the scale of informal cross-border trading in food among countries in Southern Africa has identified Malawi as the largest recipient of imports.

A joint World Food Programme (WFP) and Famine Early Warning Systems Network (FEWS NET) report noted that "informal cross-border trade played a significant role in averting widespread food insecurity in Southern Africa during the major regional drought of 2002 and 2003".

However, the report said information on informal trade was mainly anecdotal and its contribution to addressing supply and demand imbalances had thus "not been adequately quantified in Southern Africa".

To address this information gap, WFP and FEWS NET, along with other partners, had established a monitoring system for capturing informal cross-border trade.

The system began operating in June 2004 and currently covers 24 borders shared by six countries: the Democratic Republic of Congo (DRC), Malawi, Mozambique, Tanzania, Zambia and Zimbabwe.

In the initial three months of operation the monitoring mechanism recorded trades accounting for over 36,000 mt of maize, close to 3,700 mt of rice and about 6,100 mt of beans.

"The bulk of the trade has been maize exports into Malawi, which have amounted to 34,000 mt, or 94 percent of the total maize trade captured," the report said. "Since July 2004, informal traders have been bringing an average of 11,000 mt of maize per month into Malawi from her neighbouring countries. Malawi is facing a major maize deficit estimated at nearly 280,000 mt."

WFP has said it plans to feed about 1.1 million Malawians until March 2005.

Almost all the maize Malawi has imported through informal cross-border trade has come from Mozambique, as southern Malawi is virtually surrounded by Mozambique and "is the most affected by the food deficit, and trade links with northern Mozambique are well-established".

Additionally, "most of northern Mozambique had a good harvest and [internal] trade linkages with major consumption centres in central and southern Mozambique are weak" due to poor transport infrastructure.

According to the report, informal trade in maize across the Malawi/Mozambique border was being conducted with relative ease.

"The process starts from the Mozambican side, where stacks of maize are brought in bulk to the border ... these stacks are heaped on the Mozambican side of the border for sale to Malawian traders," the report said. Most of it is then transported across to Malawi by people on bicycles.

"During the peak of the marketing season for maize, July to September, the frequency and number of cyclists crossing the border increases. Currently ... it is estimated that up to 100 cyclists carrying three to four 50 kg bags ferry the maize across the border every 30 minutes... Once on the Malawi side, the maize is then consolidated into truckloads for onward shipment to inland urban markets of Malawi," the report related.

Conversely, very little informal cross-border trade has been recorded between Zimbabwe and its neighbours.

"Zimbabwe has imposed restrictive import levies for any trader that crosses its borders with more than a single bag of rice and/or maize, including maize flour. The Zimbabwe authorities also ensure that only official imports of maize by [the state monopoly] the Grain Marketing Board (GMB) or its appointed agents are permitted in Zimbabwe. As such, there is very little incentive for informal traders to deal in these commodities," the monitoring initiative found.

However, it "is probable that maize and rice may still be finding their way into Zimbabwe from Mozambique through smuggling, as there are few natural geographical barriers between the two countries".

Monitoring of informal trade allowed for better decision-making "by governments, aid agencies and traders about appropriate levels of commercial imports and food aid", the report noted.

Consequently, more borders are being assessed for inclusion in the monitoring exercise.

[ENDS]