RWANDA: Measuring Informal Cross Border Trade Between Rwanda and Her Neighboring Countries

Introduction

In Rwanda, we carry comprehensively the shuttle trade together with other informal trade. There is no specific survey targeting shuttle trade alone. What I will share is our experience in collecting processing and analyzing informal cross border trade, which includes shuttle trade.

To Rwanda, Informal Cross Border Trade (ICBT) generally refers to imports and exports of legitimately produced goods and services (i.e. legal goods and services), which directly or indirectly escape from the regulatory framework set by the government, and avoid taxes and regulatory measures, hence go unrecorded into official national statistics.

The Government of Rwanda initiated an ICBT survey in 2009 to supplement statistics collected by the Customs Authorities and reduce the statistics gap. The ICBT Survey started in May 2009 on a pilot basis, covering a few crossing points along Rwandan borders and uprating for other identified borders for one year. After that year, the government decided to carry the survey on a monthly basis since January 2012 up today.

The informal trade data are grossed up with formal trade data in the compilation of trade balance component of the Balance of Payments (BOP), International Merchandise Trade Statistics (IMTS) and National accounts, generally for external sector analysis.

Legal framework

The survey is carried out by the National Bank of Rwanda in partnership with other government institutions such as the National Institute of Statistics of Rwanda (NISR), the Rwanda Revenue Authority (RRA), the Ministry of Agriculture and Animals Resources (MINAGRI) and the Ministry of Trade and Industry (MINICOM).

Scope and instrument

We adopted the census methodology approach since the inception of the ICBT data collection in 2009. On the field, we recruit enumerators and train them on how to use Census and Survey Processing System (CSPro) - Computer Assisted Personal Interviewing (CAPI) questionnaire and subsequently deploy them to the field. ICBT data are collected and transmitted to the bank server on real-time. The data are received on central bank server, then edited, processed, used and disseminated.

The survey covers 17 official borders (borders with migration officers) and 39 major crossing points (borders with no presence of migration officers) around the country. The Borders have between 2 to 6 enumerators/field staff per border post depending of the size of ICBT and work every day of the week.

Objectives of the survey

The objectives of ICBT Survey includes-

  • Determine the commodities transacted,
  • Direction of trade (Destination/Origin),
  • Values and quantities of trade transactions,
  • Use the ICBT data to estimate revenue loss,
  • Provide a comparative analysis of recorded and unrecorded/net trade balances,
  • Determine the main beneficiary, and
  • Assess the effect of regional integration efforts on ICBT

Data collection techniques

The collection of informal cross border trade data is in accordance with the General Trade System of compiling International Merchandise Trade Statistics, which requires that all goods leaving or entering the country are recorded as they cross the customs frontiers. The data collection techniques take to account the prevailing border site conditions, the packaging of informally traded products and the general behaviors of ICBT traders.

Enumerators are positioned where they can see and talk to the traders crossing the border. In case of Buses/shuttles loading or off-loading, they stand at the Bus/shuttle area where they can interact with passengers.

Data processing

The CAPI system used for data collection uses a data transfer protocol that allows real time data from field to the bank’s server. The form in the device for data collection is built with consistency checks and validation rules which minimizes data collection errors. Also, at the back -end, when data are received are edited based on product average prices by trimming outliers.

Compilation practices

At the end of the month, ICBT data are extracted from the Business Intelligence (BI) system and are used in the compilation of BOP, System of National Accounts (SNA) and International Merchandise Trade Statistics (IMTS). Before the integration of ICBT data with official trade data, they are harmonized using HS codes. ICBT data are available for BOP, SNA and IMTS at the end of every month.

Data sources

As said earlier, to collect ICBT data, enumerators ask trade information to the traders that cross the borders between Rwanda and her neighboring country. This is done tactfully to avoid bringing non-tariff barriers on traders.

Conclusion

Since the adoption of the survey on ICBT, the Rwanda trade statistics have improved. On average, informal exports contribute about 12% of total exports whereas imports contribute around 3% of total imports.