Informal cross-border trade in East Africa : examining the persistence of “Magendo” at Busia border, Eastern Uganda

Abstract

East African governments have attempted to streamline informal cross-border trade (ICBT) permitting borderland communities to trade and interact legally across borders. This is especially through the promulgation of the East African common market protocol which through its simplified trade regime provides opportunities for small cross border traders. To benefit from his incentive however; traders should operate registered businesses, transact in values lower than 2000 US dollars, only deal in commodities that originate from East African Community member states, and cross the border only through the gazetted customs office. Nevertheless, borderland people still insistently engage in unregistered cross border exchange locally known as magendo, which is illegal. Using Geertz’ Culture and Bourdieu’s agency-structure theories therefore; I examined why illegal cross-border trade (magendo) perseveres at Busia border in Eastern Uganda despite the enabling laws that allow informal cross-border trade. Through interrogating the interactions and contradictions between informality and formality; the study provides understandings on how magendo manifests, its drivers, risks involved, and coping strategies of traders. Fieldwork took place from February, 2015 to January, 2016. Ethnographic research design was used involving indepth interviews, informal conversations, and sharing in everyday life of informants which allowed for their stories to be heard. Respondents included traders, transporters, border security, revenue enforcement officers and community leaders. Findings established that magendo contravenes formal trade guidelines, manifests in multidimensional ways: it is a way of life, source of subsistence, social capital, employment, resistance to the state, or just an economic activity. It flourishes because border areas are highly dynamic, the borders are porous and enforcement is weak. Magendo fuses into local livelihoods to become a sub-culture, and allows traders to create informal replicas of formal structures to survive. In the process, the bona-fide and illegal ICBT get entangled; highlighting the dissonance between agency and structure. The study concludes that magendo persists because of the interplay of socio-cultural, economic, geo-political and institutional factors, and it is likely to continue so long as these factors prevail. The study therefore recommends that any interventions to reduce magendo must take into account these factors.