Estimating the Informal Cross-border Trade in Central Africa
Cameroon is the largest trading partner of the Economic and Monetary Community of Central Africa (CEMAC) countries. Despite belonging to the same sub-regional organization, the formal trade ties between Cameroon and its neighbours have been hampered by a combination of factors that have spurred the growth of informal (unrecorded) trade. Interest in cross-border trade of agricultural and horticultural commodities between Cameroon and its neighbours has been overwhelming, but knowledge of its magnitude, determinants and consequences remains inadequate. This leads not only to undervaluation of figures in the national accounts, but also inhibits formulation of appropriate policies and strategies to exploit its potential impact, particularly on food security. Using a monitoring method of cross-border flows of informal trade, this study sought to estimate the volume/value of unrecorded cross-border trade between Cameroon and its CEMAC neighbours and compare it with recorded (official figures) trade. The results indicate that in 2008 a volume of just over 155,000 tons of agricultural and horticultural commodities were shipped from Cameroon to its neighbours in CEMAC at an estimated value of almost 38 billion CFA francs, representing 0.4% of the gross domestic product (GDP) of Cameroon. The comparison in relative terms shows that informal or unrecorded trade represents 96% of official trade and mainly includes agricultural and horticultural commodities. The failure of the institutional intra-business community framework through informal trade policy practices explains the informal trade in the CEMAC.