Bureaucracy pushes traders to informal borders – Analyst
Economic analyst Emmanuel Boateng says bureaucratic trade procedures and a lack of trust in enforcement at official border points drive many traders towards informal cross-border trade across the region.
Speaking on Business Breakfast on Zed, Boateng noted that many traders lack the necessary documentation or capital for formal trade, forcing them to operate informally. Proximity and established relationships also heavily influence traders’ choices.
“Formal processes are expensive and very slow. You have to go through various bureaucratic steps, such as declaring your goods through official customs and paying multiple fees and levies,” he said.
The study highlighted by Mr Boateng found that three out of four active border points are informal crossings near markets in neighbouring countries. These routes have been used for generations, with traders familiar with local terrain, customs, and often maintaining ethnic or family ties across borders.
Mr Boateng indicated that traders prefer informal crossings because they are often just as close as official posts, avoiding longer travel.
“Currency flexibility further supports informal trade, as local currencies such as the Cedi or the CFA franc are used to avoid exchange rate losses and foreign exchange shortages that complicate formal banking transactions. This allows traders to bypass costly dollar transactions by managing trade in local currency,” he explained.
Mr Boateng also pointed to a lack of trust and enforcement at official border points by authorities, reinforcing informal channels as the more viable option for many small-scale traders.
He called for the removal of these barriers, emphasising that this is essential to formalising trade throughout the region.
