Why Women Remain Trapped in Informal Trade

In Malawi up to a quarter of all households are headed by women. Agriculture is the mainstay of the economy and some 80 percent of Malawians directly depend on this sector. With an average of six children per household, most women embark on small business ventures to supplement their income from agricultural activities.

As trade becomes increasingly sophisticated and global, small businesswomen in Malawi face a major challenge in catching up with the changes--especially because female adult literacy sits at a measly 44 percent. (Up to 72 percent of the male population is literate.)

Only five percent of women in Malawi, Zambia, Zimbabwe, Swaziland, Namibia and the Democratic Republic of Congo are aware of available market opportunities in the region, according to a 2007 study conducted on behalf of the Common Market for Eastern and Southern Africa (COMESA).

The research results also showed that businesswomen in COMESA face common challenges regarding their ability to penetrate the export market. These findings are a wake-up call for women in the region, according to Mary Malunga, chairperson of the Federation of National Associations of Business Women in COMESA (FEMCOM).

She also heads Malawi's National Association of Business Women (NABW).

FEMCOM has been working towards promoting programmes that integrate women into trade and development since July 1993. It has now embarked on a programme to create awareness of export markets among women in the COMESA free trade area (FTA). The FTA includes Djibouti, Egypt, Zimbabwe, Zambia, Madagascar, Sudan, Mauritius, Malawi and Kenya.

"We want to build the capacity of FEMCOM members in business and export management skills so that women in the region are able to compete favourably in both the regional and global market," Malunga told IPS.

The sectors that FEMCOM is concentrating on are agriculture, fishing, mining, energy, transport and communication. The organisation is also looking at natural resources with the aim of improving the economic conditions of women.

COMESA has a gender policy which clearly articulates the important role of women in regional activities. Despite the policy and noble vision and objectives of COMESA, says Malunga, gender inequality remains a major problem affecting regional integration efforts.

"Women in particular tend to have limited access to regional and international markets. But the factors causing this situation have not been adequately documented," worries Malunga.

Understanding of the COMESA trade regime among particularly Malawian businesswomen has been found to be minimal. The nature and level of participation by Malawian businesswomen in COMESA intra-regional trade is only through informal cross-border trade.

FEMCOM has found that despite the launching of the COMESA FTA in 2000, women traders in the various member states are still subjected to harassment.

This includes unwarranted searches and confiscation of goods by customs officials who are not gender sensitive. These experiences discourage many women from undertaking activities beyond their borders.

Other major problems facing women in COMESA include unfamiliar and complicated procedures in export management, lack of quality control skills, packaging, import management and techniques.

"Inadequate access to trade information and market research is also a key barrier to women's participation in trade. Women tend to be more seriously affected than men by these problems due to the low levels of education among the majority of women in COMESA," Malunga points out.

She is also concerned that women may be inadvertently excluded from the benefits of the regional free trade area due to complicated procedures, such as adherence to rules of origin in order for goods to be excluded from customs duties.

"Most women may not be aware of this requirement due to illiteracy and lack of information while the majority may not qualify for certificates of origin because of the production processes they use," says Malunga.

Inadequate access to credit and finance has also been cited by the FEMCOM chairperson as a major barrier to effective participation in regional and international trade. She says the requirement of collateral disqualifies many women from accessing credit as they have limited access to and control over property.

The low quality of goods produced by women is another barrier blocking them from competing effectively in liberalized economies.

Other factors leading to the challenges are the inability to form partnerships and joint ventures; inadequate sources of capital for women entrepreneurs; and the low capacity of women's business associations.