MSME Day 2023 – Addressing MSME Traders’ Challenges in East Africa
Sauti East Africa is proud to join the world in celebrating Micro, Small, and Medium-sized Enterprises (MSME) Day. The United Nations has declared June 27th as international MSME day in order to recognize the economic contributions of MSMEs – particularly the economic empowerment of women and youth – in order to support sustainable development across the globe.
MSME day gives INGOs, CSOs, and practitioners an opportunity to explore the particular issues that face MSMEs around the world. In East Africa, MSMEs face a multitude of challenges when it comes to CBT. One set of issues relates to the information asymmetries that MSMEs face when crossing borders and interacting with more informed officials. While complying with the variety of regulations across Africa’s national borders is difficult enough for MSME traders, the complexity and processing times of official regulations provides ample opportunities for corruption and bribery, which eat into the profits of MSME traders.
For youth and women-led MSMEs, poor information on these regulations makes them more vulnerable to exploitation, harassment, and sexual and gender-based violence. Moreover, poor information on current market conditions means that MSMEs are more vulnerable to increasing economic volatility.
Sauti works to provide up-to-date and relevant trade information to East Africa’s MSME cross-border traders. We specifically focus on designing resources and platforms that are accessible to the unique needs of East Africa’s MSMEs. This information ultimately helps women-led and youth-led participation in regional trade. We do so by providing mobile based trade insights through SMS, USSD, and WhatsApp. Removing the barrier of smartphone access is crucial as current digital information solutions are inaccessible to the 74% of women traders and farmers who lack internet, smartphone or computer access.
The lack of access to technology is why we have created a mobile-based service to collect and provide trade data to women-led and youth-led MSMEs. Below are a number of the information features that we provide to MSMEs on our platforms:
|• Market Prices
|• Sustainable Agricultural Info & Services
|• COVID-19 Info
|• EAC Trade & Tax Info
|• Exchange Rates
|• Finance & Management Services
|• Report a Border Experience
|• Business Formalization Info
|• Climate Adaptation and Forecast Info
|• Policy Communications
|• Health Info
|• Legal and Social Services Info
The information from our trade platforms prepares East Africa’s traders with the information they need to work safely, legally, and profitably each day. When we look at what information features are most relevant to MSMEs in East Africa, based on usage of Sauti’s Trade and Market Information platforms, we find that the most dynamic and frequently changing information is of greatest relevance to MSMEs – information such as market prices, weather, and exchange rates.
With access to the above service features, traders and farmers are able to appropriately and effectively prepare their goods to trade on a regular schedule. For example, Edna Mudibo, from the Kenya/Uganda border in Busia has shared:
“Sauti is like a secret partner in my business – it’s there to give me information before I go to the market and help me estimate my profit. Before I even leave my house I know the price of groundnuts in Gulu and Lira, the current exchange rate and the amount of tax I will pay.”
By providing East Africa’s Traders with these insights they are able to, for example, check the weather daily to advise their travel options and travel time. Then, they can check the trade value of their specific goods to plan their expenses according to how much money they can expect to consistently bring home. This small but crucial information empowers women-led MSMEs in East Africa to participate in their economies and also have the opportunity to overcome gender-based barriers and be financially independent.
As the African Continental Free Trade Agreement (AfCFTA) is implemented, Sauti is working to recommend ways on how to best position East Africa’s MSMEs for success. Our most recent project was developed in collaboration with the United Nations Development Program. Some of the recommendations that we developed, which related to leveraging the positions of women-led and youth-led MSMEs, include:
- Recognize the importance and experience of women and youth issues in the success of regional value-chain trade facilitation.
- Develop a more robust case for what these positive links with the AfCFTA implementation strategy look like so that youth and gender-specific practitioners may better understand their alignment with the AfCFTA agenda.
- Identify and leverage women and youth-led MSMEs as leaders in informal cross-border trade communities, early adopters of technology, and effective mobilizers of technical resources.
Sauti continues to advocate for MSMEs equitable access to trade and information resources. In the coming months, we are releasing several reports that take deeper dives into these issues using Sauti’s Trade Insights data and our experience working with more than 100,000 MSME traders in East Africa. Ultimately, we hope that the recommendations developed in these reports will guide the development of a safer and more equitable trade environment for MSMEs in the region.