The Informal Sector in Francophone Africa

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GOVERNMENT POLICIES, SMUGGLING, AND THE INFORMAL SECTOR

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respectively, as well as to other countries in the region, to a lesser extent. The main products are bulk food items such as rice, sugar, and flour; processed foods such as tomato paste, cooking oil, condensed and canned milk, tea, and soft drinks; fabric of various sorts; used cars; and other basic household items such as batteries, candles, and matches. Cross-border trade of locally produced goods is also important, especially for Benin. A very large proportion of many agricultural and manufactured goods consumed in Benin are imported from Nigeria, according to fieldwork done by the research institute LARES and reported in INSAE (2001). Petroleum products in particular are imported almost entirely from Nigeria, motivated by the subsidized prices in that country. In some cases, manufactured goods produced in Nigeria are more competitive in neighboring countries such as Benin than imports from Asia, especially since they escape duties when smuggled into Benin. According to our interviewees, however, imports of manufactured products from Nigeria have declined in recent years. There is also substantial unrecorded trade in locally produced agricultural commodities in Benin. The overall structure of merchandise trade for The Gambia and Benin is shown in table 9.1, which combines official data with estimates of unofficial trade flows, all as a percentage of gross domestic product (GDP). In both countries, official merchandise exports are very small relative to imports, having dropped steadily since the 1970s. These declines in merchandise exports are Table 9.1 Official Imports, Exports, Reexports, and Transit in The Gambia and Benin, 2004–07 % of GDP Country and type of trade

2004

2005

2006

2007

Official exports

2.5

1.7

2.2

2.0

Official reexports

1.6

0.1

The Gambia

Goods in transit

2.3

1.4

Official imports

57.1

51.4

50.8

47.4

Estimated unofficial imports for reexport

24.1

18.3

17.1

14.3

Estimated unofficial reexports

32.6

24.7

23.1

19.4

Official exports

7.4

5.1

5.0

6.0

Official reexports

0.3

0.5

0.4

0.6

Goods in transit

26.0

30.9

44.3

49.3

Official imports

22.0

20.6

21.3

26.2

Estimated unofficial imports for reexport

22.4

23.6

26.6

32.4

Estimated unofficial reexports

30.2

31.9

35.9

43.7

Benin

Sources: Customs and trade statistics for Benin and The Gambia; World Bank 2010. Note: — = Not available.


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