Call to formalise aid informal trade

Mohloai Mpesi

The Principal Secretary of the Ministry of Trade, Tlhopeho Sefali has called on an initiative to aid the informal trading sector in the country.

Sefali said this in a dialogue of bridging the Divide between Formal and Informal Cross-Border Traders which was held in Maseru.

When responding to a question demanding the importance of informal cross-border traders to the overall trading in Lesotho and how small can informal traders increase their presence taking note of the revenue that has kept people surviving over a long period of time, Sefali elaborated that the sector needs to be formalised in a bid to ensure that traders attain government grants.   

The topic of the day was central to the challenges and safety of informal cross-border traders, formalization of informal traders as well as increasing the economic contribution of informal cross-border traders.

He further said different sectors needed to put their hands on deck in order to work around finding a solution to the problems immobilising the sector, pointing to the Lesotho Revenue Authority (LRA), Ministry of Small Business Development, Cooperatives and Marketing and other relevant stakeholders.    

“Unemployment among the youth and women is very high and without informal trading I don’t see how they will survive. So our stance as the Ministry of Trading is that informal trading should be formalized. Let people get some form of registration or something that will make them to be recognised as traders when they cross borders,” he said.

“These are people who raise families, children to school and do all sorts of things to survive, so they have huge challenges that we have to work around and they need our support. Our country is highly dependent on South Africa and 90% of our traders buy from South Africa. So we need assist our informal traders especially with our sister country, South Africa to see how we can make it easy for them to cross the border,” he said adding that the government of Lesotho and that of the neighbouring Republic of South Africa have to work together to find a solution. 

He continued that, “Informal traders earn their living by selling informally and that according to my opinion constitutes a very huge part of our population. Most of us got education through the hustle of our parents who were doing the same informal trading and you cannot push it away, it has been here long before we were here and it will continue”.

“I have picked that the main challenge that the informal traders face is lack of registration and that makes one to think of them once in a while. Their economic impact is great although what they do is to make sure that they survive. Informal trading is very important, it is a survival thing because there are no other means of surviving,” he said.

He said since the informal traders experience challenges of crossing the border, they have to join the African Continent Free Trade Area (AfCFTA) Market shared by 55 African Union Member States and committed to eliminate tariff and non-tariff barriers on trade in goods as well as facilitating free movement of services across the continent.

According to the Ministry of Trade’s explanation, each stakeholder has a role in the implementation of AfCFTA where the role of the Government is to level the playing field, while the private sector’s main role will be to trade under this agreement.

Among other roles of Government is facilitate private sector participation in networking platforms within the continent , participate in regional trade fairs to meet potential buyers and explore these markets. The National Trade Strategy launched in December, 2020 also provides guidance on policy options to be undertaken to improve private sector competitiveness. Three main sectors Horticulture, Light industry, textiles and clothing.

The Ministry is also developing and implementing the linkages strategy- objectives to create a pool of domestic enterprises to participate in value chains to stimulate rapid job creation. Implementation of the EPA action document which focuses on tapping on the EU Markets, its impact will be beneficial for implementation of other Trade Agreements including the AfCFTA.