No. 52: Migration, Remittances and ‘Development’ in Lesotho

Lesotho is one of the most migration dependent countries in the world. Migrant remittances are the country’s major source of foreign exchange, accounting for 25% of GDP in 2006. Lesotho is also one of the poorest countries in the world due to high domestic unemployment, declining agricultural production, falling life expectancy, rising child mortality and half the population living below the poverty line. The majority of households and rural communities are dependent on remittances for their livelihood. Households without access to migrant remittances are significantly worse off than those that do have such access. Since 1990, patterns of migration from Lesotho to South Africa have changed dramatically. These changes include significant increases in legal and irregular cross-border movement between Lesotho and South Africa; declining employment opportunities for Basotho men in the South African gold mines; increased female migration from Lesotho; growing internal female migration of young women within Lesotho; a ‘brain drain’ from Lesotho to South Africa and the growth of AIDS-related migration in Lesotho. The central question addressed in this report is how these changes have impacted remittance flows and usage. For most of the twentieth century, the vast majority of migrants from Lesotho were single young men who went to work on the South African gold mines and remitted funds to their parents’ households. Migration has become much more mixed in recent years and the profile of migrants leaving Lesotho has changed significantly: The number of Basotho male migrants working on the mines declined from 100,000 in 1990 to 46,000 in 2006. However, the majority of male migrants from Lesotho are still mineworkers. The demographic profile of male migrants has shifted markedly. Migrants used to be single young men. Now 84% are married and 77% are heads of households. Nearly 50% of migrants are over the age of 40 and only 5% are under 25. Half of the growing number of female migrants from Lesotho are domestic workers in South Africa. The rest are spread between the informal sector (9%), commercial farmwork (5%), self-employed businesses (6%), the professions (5%) and skilled manual work (5%). In other words, although one sector dominates, female migrants work in a wider variety of jobs than males. On the whole, female migrants are younger than males but significant numbers of older women are also migrants. In contrast to male migrants, only 27% of female migrants are married. On the other hand, 42% are divorced, separated, abandoned or widowed. Most older women migrants fall into this category. A sizable group of women thus has the responsibility of being the head of their own household but have to migrate to South Africa in order to ensure the survival of the household. Over 40,000 young, mostly single, women are internal migrants working in Lesotho’s textile factories. The textile workers have been called the ‘new miners’ though wages in the factories are paltry compared with the mines. If the textile industry did not exist, or closed down, then most of these women would probably migrate to South Africa. Most migrants who work outside mining are irregular migrants as the South African government is reluctant to give them work permits. This increases their vulnerability to exploitation. Many women are in South Africa on 30-day visitor’s passes and are supposed to return to Lesotho every 30 days to renew them. If they do not, they have to pay a “fine” when they eventually return home. Changes in the profile of migration from Lesotho have impacted on remittance flows in a number of ways: The decline in mine employment has not led to a decrease in remittance flows to Lesotho. On the contrary, total remittance flows increased as a result of increases in mine wages. But rising remittance flows are directed to a shrinking number of households thus increasing inequality between households and accelerating levels of poverty and food insecurity for households that do not have a mineworker. Female domestic workers in South Africa remit less to Lesotho than male miners. This is primarily because they earn about a third as much as their male counterparts. Domestic workers are notoriously exploited in South Africa. Some migrants have second families or partners in South Africa. In the case of male migrants, this tends to reduce the amount remitted to Lesotho. In the case of female migrants, it often increases the flow of remittances as they are able to remit some of their partner’s earnings back home as well. The vast majority of cash remittances flow through informal channels (usually carried by hand). Only 5% of migrants use the Post Office and 2% the banks to remit. Remittance-receiving households in Lesotho tend to use most of the remittances for basic needs: Migrant remittances form an important, and in many cases, the only, source of income for migrant-sending households in Lesotho. Over 95% of the households with male migrant members and 90% with female migrant members list remittances as a source of household income. Fewer than 10% list income from the second-ranking income source, non-migrant wage labour. Most households (89%) say that the contribution of remittances to household income is important or very important. Remittances are also key to having enough food in the household (with nearly 90% saying that it is important or very important). The most common use of remittances is for food (90% of households spend remittances on food), clothing (76%), school fees (56%) and fares for transportation (34%). Almost three quarters of households do not invest remittances in agriculture. Of those that do, a quarter spend remittances on seed, 18% on fertilizer, 12% on tractors and 4% on livestock. Nearly 19% of households put some remittance income into savings. Other expenditures such as funerals (incurred by 16% of households) and funeral and burial insurance policies (29%) reflect the impact of HIV and AIDS. Households with female migrants are more likely to supplement remittance earnings with other sources of income. Remittances are not used on luxury consumer items but are used, directly or indirectly, to meet the household’s subsistence needs. The proportion of households investing remittances in formal or informal business is extremely low. In the rural villages, remittances are often “pooled” by women through burial societies, grocery associations and egg circles. As well as loaning money to be paid back with interest, the associations buy food and groceries in bulk to divide up among members. Remittances are essential to household survival in Lesotho but the opportunities for investing remittances in productive, developmental activities are very limited. This suggests that it is important to stop seeing Lesotho as the only site for entrepreneurship by migrants from there. Companies from all over the world are permitted to come and do business in South Africa. The same opportunity should be afforded to Basotho households. Basotho should also be freely allowed to do business in South Africa. Instead, migrants are more often viewed as a threat and undesirable. Migration needs to be re-thought as something that is mutually beneficial for both countries. The only realistic option is to open the borders for unrestricted travel in both directions and to allow Basotho to pursue economic opportunities in South Africa free of harassment and deportation

No. 49: Gender, Migration and Remittances in Southern Africa

Migrant remittances have become an important source of income for many developing countries, exceeding official development assistance. As a result, migration and remittance behaviour are becoming a growing focus of international attention. Understanding the processes and patterns of remittance behaviour can help shed light on their usage and impact, both on recipient households and on wider socio-economic development in migrant-origin countries. One key aspect of such an understanding is the gender dynamics of migration and remittance practices. Globally, there is evidence of the feminization of migrant flows, with women increasingly migrating as independent migrants in their own right. Female migrants maintain strong ties to family members in their home countries. These include significant flows of remittances, of both cash and goods, sent to family members at home. Southern Africa has a long history of cross-border migration and associated flows of remittances. Although cross-border economic migration in the region has been dominated by male migrant labour to the South African mining industry, women have also engaged in movement across the region’s borders for purposes of seeking work. Evidence suggests that female migration in the region, especially to South Africa, has increased significantly over the past 10-15 years. Little is known about the nature of migrant women’s remittances and their impact on the households that receive them, nor about the changing patterns of male and female migration over the past decade. SAMP devised the Migration and Remittances Surveys (MARS) to provide nationally-representative data on remittance flows and usage at the household level for five SADC countries: Botswana, Lesotho, Mozambique, Swaziland and Zimbabwe. SAMP-led research teams in each country conducted the survey using a standardized questionnaire and sampling strategy. Households were randomly selected and included in the survey only if they had members who were cross-border migrants working outside the country. The MARS survey collected two different types of data: data on individual household members, both migrant and non-migrant, and data on migrant-sending households. In total, 4,700 household interviews were conducted in the five countries and information collected on over 30,000 people. In addition to questions about migrant destinations, occupations and demographics, questions were asked about remittance behaviour, the methods used for remittance transfer, the role of remittances in the migrant-sending household economy, and the impact of migrant remittances on migrant-sending households. Gender-related variables were included in the survey through a question asking the sex of individual household members, and also in terms of household headship, marital status, relationship to the head of household, and household type (e.g. female- or male-centered; nuclear or extended). The overall survey findings have been presented in an earlier SAMP report (Migration Policy Series No. 44). Building on that earlier report, this report presents a gender breakdown and analysis of the MARS findings. As the Botswana sample included only a very small number of female migrants, Botswana has been left out of the analysis and so the report covers the four countries of Lesotho, Mozambique, Swaziland and Zimbabwe. Gender analysis reveals significant gender-based differences in migrant demographics, including divergent patterns and trends between male and female migrants in terms of their age and marital status. Yet it also reveals striking similarities between male and female migrants in terms of the nature, role and impact of their remittances. The main findings in terms of migrant demographics and migration trends for men and women are as follows: Cross-border migration in the region remains dominated by men. Overall, just over 15% of the migrants identified in the MARS sample were women. The proportion of women amongst migrants varies widely from country to country. Zimbabwe stands out as the country with by far the highest proportion of migrants who are female, at 43.6%, with Lesotho a distant second at 16.4%. In the other countries surveyed, the proportion of migrants who are female was found to be below 10%. Although the lack of reliable benchmark data makes it impossible to quantify, the MARS data suggests that there has been an increase in female migration over the period 1994-2004. Compared to female migrants, a relatively higher proportion of male migrants had been migrating for periods of over a decade - except in the case of Zimbabwe, where extensive out-migration is a more recent phenomenon for both men and women. The type of women who migrate appears to have undergone significant changes. Migration surveys conducted by SAMP in the late 1990s showed that female migrants were more likely to be older and to be married than male cross-border migrants. MARS findings show that today’s female migrants are younger and less likely to be married than male migrants. The proportion of female migrants in the younger, 15-24 age bracket is significantly higher than the equivalent proportion for males in Lesotho, Mozambique and Swaziland. In these same three countries, men are correspondingly over-represented in the older, 40-59 age bracket compared to women. Zimbabwean male and female migrants’ age profiles were roughly equivalent, with the majority in the 25-39 age bracket. In all four countries, and especially in Mozambique and Swaziland, the category containing the highest proportion of female migrants was ‘daughter’ – almost three-quarters of the female migrants in Mozambique and two-thirds in Swaziland. These countries’ female migrants thus most closely conform to the historical pattern of migration to South Africa being dominated by young, unmarried adults. On the male side of the equation, migration appears to be increasing among older, married heads of household. Some 76% of male migrants from Lesotho and 61% of those from Swaziland are heads of their household. Male migration from Mozambique is still dominated by sons (49%); that from Zimbabwe is more or less equally divided between sons and household heads. This suggests that for men, migration is becoming a career path rather than just a temporary phenomenon at a particular stage in younger men’s lives, whereas young single women are engaging in migration practices traditionally found amongst young single men. In Lesotho, Mozambique and Zimbabwe, female migrants revealed higher levels of divorce, separation, abandonment and widowhood than their male counterparts. This is especially true of Lesotho, where 24% of female migrants are widows and a further 20% divorced or separated. These women are likely to be the primary or sole breadwinner for their families. Female migration and female household headship appear to be closely linked. Among female migrants, the proportion coming from female-centred households, having no husband or male partner, was 43% for Lesotho, 41% for Mozambique, 31% for Swaziland and 28% for Zimbabwe. In addition, 24% of the female migrants from Lesotho and 17% of those from Zimbabwe, the two countries with the highest proportions of women among their migrants, were themselves household heads. Male migrants hail predominantly from male-headed, nuclear or extended-family households. Female migrants from Lesotho and Swaziland are better educated than male migrants. Men from these countries are over-represented in the categories of ‘none’ or ‘primary’ education, while women migrants are more likely than men to have some secondary schooling. Mozambique has the least educated migrants of the four countries, with close to three quarters of both male and female migrants having only primary education. Zimbabwean male and female migrants have roughly equivalent education profiles, with a highly educated migrant cohort in which over 75% have secondary education or above. The geographical and economic profiles of male and female migration also display both similarities and divergences. Here, the main findings are as follows: For both male and female migrants, the main destination is South Africa. Lesotho’s migration is almost entirely (99%) to South Africa, as is that of Swazi men. Some women migrants from Swaziland can be found working in countries beyond the region (13.5%). Mozambique sends small numbers of migrants, especially women, to Swaziland, Botswana and other SADC countries in addition to South Africa. Zimbabwe is again the exception, with only one third of its migrants (male and female) in South Africa and 40% working in countries beyond Southern Africa. Perhaps the greatest difference between male and female migrants is in their activity and employment profiles. Minework is still the predominant form of employment for male migrants from Lesotho, Swaziland and Mozambique. Almost 80% of male migrants from Lesotho and two-thirds from Swaziland work on the South African mines. In the case of Mozambique, the figure is one-third. Male migrants from Mozambique also work in a range of non-mining occupations including skilled and unskilled manual labour (18%). Zimbabwe’s more educated male migrants work in professional and service occupations, while others are engaged in trade. Few men from the other three countries listed trade as an occupation. In general, women migrants are spread across a wider range of occupations than their male counterparts. Relative to male migrants, female migrants are less likely to be in formal employment and more likely to be engaged in informal economic activity. Trading is a significant economic activity for female migrants from all four countries, with trade being particularly important as an occupation for women from Mozambique and Zimbabwe. Domestic service is a more significant form of employment for women from Lesotho and Swaziland. Informal sector production is another important occupation for female migrants. Agricultural, manual and ‘other service’ work occupy a small but significant number of migrant women. Among more skilled women, professional and office occupations are common, and 16% of Zimbabwe’s female migrants are employed in the health sector. Given this gender difference in occupation and employment, any similarities or differences between men and women in their remittance practices, and in the extent to which their households depend on those remittances, are of interest. The MARS findings outlined below demonstrate the extent and significance of remittance income to recipient households. For most migrant-sending households, migrant remittances form the main source of household income, although male migrants’ remittances are more likely to be the primary or sole source of income for their households. Lesotho has the highest incidence of households reporting remittance earnings, followed by Zimbabwe, Mozambique and Swaziland. Households reporting remittance income from male and female migrants respectively in each of the four countries was: Lesotho 96% (M) and 90% (F); Zimbabwe 85% (M) and 78% (F); Mozambique 77% (M) and 65% (F); and Swaziland 63% (M) and 64% (F). The amounts of money remitted by female migrants are significantly lower than those of male migrants, in part reflecting women migrants’ lower levels of income and employment security. Gender differences are most stark in Mozambique and Lesotho. Zimbabwe’s more gender-equivalent migration profile is again borne out in the remittance data, with men and women remitting similar amounts. The median annual values of remittances received by male migrant-sending households were: R9,600 in Lesotho; R2,011 in Mozambique; R2,400 in Swaziland; and R1,093 in Zimbabwe. For households sending female migrants, median remittance receipts were: R3,600 in Lesotho; R302 in Mozambique; R1,800 in Swaziland; and R1,093 in Zimbabwe. Despite remitting less than men, Lesotho’s female migrants still remit larger sums than female migrants from any of the other three countries: twice as much as second-placed Swaziland, three times as much as women from Zimbabwe, and ten times as much as women from Mozambique. This probably reflects the higher incidence of household headship among Lesotho’s women migrants, possibly along with higher earnings than women from other countries (e.g. as domestic workers rather than informal traders). Lesotho’s migrant-sending households displayed the highest dependence on remittance earnings, reporting fewer alternative sources of income. By contrast, many households in the other three countries had remittances as part of a bundle of incomeearning strategies, including wage work, casual work and formal or informal business, although remittances remain their primary source of income. Multiple sources of income were found especially among households sending female migrants. Female migrants remit lower sums, making other household income sources a necessity. Women are also less likely than men to be household heads, which means that they are often members of households with other working adult members. The proportion of female migrants sending home goods is slightly higher than the equivalent proportion of male migrants, especially in Zimbabwe (72% of women, 62% of men) and to a lesser extent Lesotho (23% of women, 20% of men). In Mozambique and Swaziland, male and female migrants were equally likely to remit goods, at 65% and 16% respectively. Zimbabwe and Mozambique had the highest incidence of non-monetary remittances, whereas monetary remittances were much more significant in Lesotho and Swaziland. The significance and impact of both male and female migrants’ remittances is evident in the contribution of remittances to household expenditure and the stated importance of remittances by recipient households: Household expenditure data show that the main household purchases for both male and female migrant-sending households are the basic commodities of food, domestic fuel and clothing, and fundamental services such as schooling, health care and transport. While the rank order of items purchased is broadly similar or even identical for male and female migrant-sending households, gender differences emerge in the actual proportion of households reporting a particular expenditure. In Lesotho, in almost every category, expenditure in the past month was reported by more male than female-migrant households. Gender-based patterns are more mixed in Mozambique, although lower proportions of female migrant-sending households reported expenditure in the key categories of food, clothing, medical expenses, education and transport. In Swaziland, there is no clear or consistent overall difference based on migrant gender. Zimbabwe displays the strongest similarity between expenditure in male and in female migrantsending households, consistent with findings from the rest of the survey in that country. Certainly in Lesotho and Mozambique, female migrant-sending households do thus appear to be poorer than male migrant-sending households. There are also important gender differences, as well as differences between countries, in the estimated amounts of monthly expenditure on particular categories of expenses. Women migrants from Lesotho and Mozambique come from households with lower monthly expenditures, in almost every category, than households with male migrants. Swaziland displays the opposite gender pattern. Swazi households where the migrant members are female spend more in each category than households with male migrant members. Zimbabwe again stands out as the country with strongest gender similarity, suggesting that its male and female migrants come from similar sorts of households in socio-economic terms. As the primary source of income for the majority of households, remittance earnings are vital in enabling households to meet their basic needs. Food is the most common annual expenditure of remittance money in all four countries and in both male and female migrant-sending households. Second in all countries is either clothing or school fees. Clothing or school fees also rank third in all countries except Swaziland, where purchases of agricultural inputs rank above clothing. Remittances do not appear to be spent on non-essential or luxury items; but nor are they commonly directed towards savings or investment in business or other productive activities. They are, however, significant in sources of investment in children’s education. Remittance-receiving households confirmed the significance of remittances to food purchases. The most consistent importance rating, across countries and migrant genders, is food, with school fees and clothes also rated highly by many. There are some gender differences, with men’s remittances seemingly more crucial to the purchase of basic livelihood items such as food, than women’s. Given that men are older, more likely to be married, and more often the heads of households than female migrants, it is perhaps surprising that this gender difference is not greater. Remittances of goods are also focused on basic household commodities. The ‘typical’ male or female migrant sends home money, which their households use to buy food and other basic goods and services, and brings home clothing, food and other goods. Some consumer goods and other ‘luxury’ items (e.g. electronic goods) are also sent home, as they are more readily available and cheaper in South Africa. In addition to making regular remittances, migrants send home money in times of need, or to meet unexpected costs (such as funerals). Some gender differences are evident in these emergency remittances, although this is not consistent across all four countries. In Lesotho and Mozambique, a higher proportion of male migrants send money in times of need, whereas in Swaziland female migrants are more likely to do so. In Zimbabwe, once again, there is very little difference based on the gender of the migrant. Emergency remittances are clearly important to the households receiving them. They are seen as important or very important by over 90% of migrant-sending households in each of the four countries, with only very small differences on the basis of migrant gender. Emergency remittances appear to be especially significant to households in Swaziland and Zimbabwe. Perceptions of the overall impact of migration reinforce the overall positive contribution made by migrants: There is a generally favourable view of cross-border migration. Respondents in Zimbabwe are the most positive. Close to 90% regard the impact of migration as either positive or very positive, with only a small difference based on the gender of the migrant. Respondents in the other three countries were broadly positive, although more so for male than for female migration. Close to 70% of the male migrant-sending household respondents in Lesotho, Mozambique and Swaziland regard migration as having positive or very positive impacts. The respective values for each country’s female migrant-sending households were 59%, 53% and 64%. Perceptions of the positive impacts of working in another country reinforce the findings from income, expenditure and deprivation data i.e. that migrants support their households, improve living conditions and provide household income. Female migration is seen as providing the same sorts of benefits as male migration. While the economic benefits of migration are recognized, so too are some of its personal and social costs. These include loneliness, being away too long, and placing too much responsibility on family members left behind. The broad patterns are the same, irrespective of whether the migrant is male or female. Remittances clearly play a vital role in supporting Southern African households. Not only do migrants, whether male or female, demonstrate an unusually high tendency to send money home to their families, but those remittances are fundamental in enabling families to meet their everyday needs. Remittance behaviour and the role of remittances in the household economy differ only slightly based on the gender of the migrant. This demonstrates that women’s migration, while lower in volume than male migration, is nevertheless highly important to the migrant-sending household. Given that so many female migrants come from female-centred households, with no husband or male partner, women’s migration is especially significant to such households as the primary – often only – source of household income. The MARS data also suggest that differences between male and female migration, and between male and female migrants, are starting to diminish. Certainly young, unmarried women appear to be engaging in ‘economic’ migration more than they did previously, while male migration is extending into broader spheres of economic activity, both formal and informal, as well as into older age cohorts. If the patterns and trends identified here are both valid and sustained, women’s cross-border migration in the region looks set to increase in extent and socio-economic significance

No. 42: States of Vulnerability: The Future Brain Drain of Talent to South Africa

This publication presents the results of SAMP’s 2003 Potential Skills Base survey (PSBS) in four SADC countries. The PSBS was also implemented in South Africa and Zimbabwe

No. 69: Calibrating Informal Cross-Border Trade in Southern Africa

Informal cross-border trade (ICBT) is a significant feature of regional trade and international mobility in Southern Africa. The exact number of participants and economic importance of this trade is unknown because no official statistics are collected. Despite its obvious presence at every border post throughout the SADC region, ICBT remains largely invisible to policy-makers. Indeed, in government circles it is more often associated with smuggling, tax evasion and illegality than with innovation, enterprise and job creation. On the research side, there is a growing body of case study evidence that ICBT plays a critical role in poverty alleviation, food security and household livelihoods in Southern Africa. But its overall character and significance is unknown. With this in mind, SAMP initiated a project to examine cross-border regional trade at a selection of important border posts throughout the region. This research led to a number of country reports that provided rich insights into ICBT in particular countries. This report combines the data collected by each of the country teams and analyses the data set as a whole. The first issue addressed in the report is whether ICBT traders are a homogenous group. The research shows that this is far from being the case and that more attention needs to be paid to different types of traders and trading activity. Second, the report examines the activities of cross-border traders including the types of goods traded, the sources of those goods and where they are sold. While the majority of traders purchase goods from formal outlets in their countries of destination, most of these goods enter the informal economy on their return home. Third, the report examines financial transactions at the borders showing that most traders pay extremely small amounts of duty, which hardly justifies the effort of collecting it. On the other hand, only a small minority collect the VAT they are owed when they leave the country of purchase. Finally, the report itemizes the problems and challenges faced by informal traders when crossing borders. In total, the SAMP survey covered 20 land border posts connecting 11 Southern African countries using a threefold methodology. First, all people crossing through the selected border posts were monitored over a 10-day period and the number of ICBT traders counted. Second, the interactions of traders with customs officials were observed and the types, value and volumes of goods declared and duties paid were recorded. Third, a sample of traders was interviewed using an origin and destination (O&D) survey. During the course of the exercise, more than 205,000 people, including 85,000 traders, were counted passing through these border posts. The transactions of over 5,500 traders with customs officials were monitored and over 4,500 traders were interviewed. The study demonstrates that informal cross-border is a complex phenomenon and not uniform across the region, or even through border posts of the same country. However, the overall volume of trade, duties paid and VAT foregone, as well as the types of goods and where they are produced, indicate that this sector of regional trade should be given much greater attention and support by governments of the region as well as regional organizations such as the Common Market for Eastern and Southern Africa (COMESA), SADC and the Southern African Customs Union (SACU). The major findings at the regional level were as follows: Demographically, women comprise a significant proportion of traders and constitute the majority of traders crossing through nearly half of the border posts surveyed, including one of the busiest at Beit Bridge between South Africa and Zimbabwe. At the same time, an unexpectedly large number of men were also involved in ICBT. Malawi and Zambia had significantly more male than female traders, for example. Most ICBT is bilateral in character; that is, traders tend to operate between their home country and one other country. Trading into a third country is comparatively rare. At the same time, the vast majority of traders crossing into a country with goods to sell are citizens of that country. ICBT by traders of other nationalities is uncommon. Although South Africa is a major source of goods purchased by traders, the absence of South African informal traders was very noticeable. The reasons why South Africans do not participate in ICBT requires further exploration but it stands in marked contrast to formal sector regional trade where South African companies predominate. ICBT is a neglected market opportunity for small-scale South African entrepreneurs and the obstacles to their participation need to be better understood. The majority of traders travelled frequently to other countries for short visits (sometimes for less than a day) to buy goods to sell in their home country, or to sell goods that they had bought for that purpose in their home country. Only 13% of respondents bought and sold goods while travelling (two-way trading). Frequency of tracel also varied both within and between countries, with traders in the Namibian (42%) and Zambian (25%) surveys being most likely to travel every day. Others travel at least once a week (Mozambique, 67%; Zambia, 34%). Some travel less frequently, but at least once a month. Very few stay more than a month in another country. The types of goods carried by informal cross-border traders vary widely, but at most borders the trade was dominated by food, especially groceries and fresh produce. Again, there was considerable variability at different borders. New clothes, household and electrical goods comprised a significant proportion of the stock of some cross-border traders. Other goods identified in the survey included second-hand clothing, petrol, alcohol, car parts and construction materials. Traders mostly source their goods from the formal sector of destination countries. A small proportion obtain their goods from informal markets in other countries. Many traders acted as wholesale importers of goods, selling the goods they carried across borders to vendors in informal markets. Others sold from their own stalls in informal markets, door to door, or to networks of family, friends and other individuals. A small proportion sold to retailers and restaurants in the formal sector. The value of goods carried by traders indicates the complexity and diversity of this sector. A significant cohort of traders appeared to be survivalists as many said they carried less than ZAR500 worth of goods. However, at least some of these traders travel frequently with low-value loads, rather than infrequently with high-value loads. Most traders travelled with loads in the range of ZAR1,001-5,000. A small cohort of traders travelled with loads worth more than ZAR15,000. Informal traders make a relatively significant contribution to duties collected at border posts. During the 10-day survey period at the 20 border posts, ZAR3,750,000 was collected from 1,780 traders. Duties collected varied between and within border posts. In some surveys the value of duties paid per trader was less than ZAR50. Interestingly, duties were being incorrectly collected at some borders between Southern African Customs Union countries (for example, between Botswana and Swaziland and South Africa). Traders said they were willing to pay duties, but wanted amounts reduced and the process to be more transparent. Although most traders buy their goods in the formal sector, few claim VAT when leaving the country of purchase. Many did not know they could do this while others said that the systems are too complex and time consuming. Traders who do not claim VAT back make an unintended contribution to the fiscus of the country where they buy their goods. Responses to questions about treatment from officials at the borders were generally positive but varied between and within border posts. Larger and busier posts generally received less favourable reviews. The scope and scale of informal cross-border trade across the SADC suggests that it makes a significant contribution to regional trade and the retail economies of the region and is consistent with the stated aims of both the SADC and COMESA to promote intra-regional trade. Small-scale cross-border trade could, if promoted and supported, provide a route to the development of pro-poor trade policies that could have a direct impact at the household level. If trade policies for the region are to be successful, the activities of these entrepreneurs need to be included in planning processes. ICBT comprises a significant component of regional economic activity for most countries in Southern Africa. It is highly visible at border posts throughout the region. Only amongst policy-makers and governments does it remain largely invisible

No. 52: Migration, Remittances and ‘Development’ in Lesotho

Lesotho is one of the most migration dependent countries in the world. Migrant remittances are the country’s major source of foreign exchange, accounting for 25% of GDP in 2006. Lesotho is also one of the poorest countries in the world due to high domestic unemployment, declining agricultural production, falling life expectancy, rising child mortality and half the population living below the poverty line. The majority of households and rural communities are dependent on remittances for their livelihood. Households without access to migrant remittances are significantly worse off than those that do have such access. Since 1990, patterns of migration from Lesotho to South Africa have changed dramatically. These changes include significant increases in legal and irregular cross-border movement between Lesotho and South Africa; declining employment opportunities for Basotho men in the South African gold mines; increased female migration from Lesotho; growing internal female migration of young women within Lesotho; a ‘brain drain’ from Lesotho to South Africa and the growth of AIDS-related migration in Lesotho. The central question addressed in this report is how these changes have impacted remittance flows and usage. For most of the twentieth century, the vast majority of migrants from Lesotho were single young men who went to work on the South African gold mines and remitted funds to their parents’ households. Migration has become much more mixed in recent years and the profile of migrants leaving Lesotho has changed significantly: The number of Basotho male migrants working on the mines declined from 100,000 in 1990 to 46,000 in 2006. However, the majority of male migrants from Lesotho are still mineworkers. The demographic profile of male migrants has shifted markedly. Migrants used to be single young men. Now 84% are married and 77% are heads of households. Nearly 50% of migrants are over the age of 40 and only 5% are under 25. Half of the growing number of female migrants from Lesotho are domestic workers in South Africa. The rest are spread between the informal sector (9%), commercial farmwork (5%), self-employed businesses (6%), the professions (5%) and skilled manual work (5%). In other words, although one sector dominates, female migrants work in a wider variety of jobs than males. On the whole, female migrants are younger than males but significant numbers of older women are also migrants. In contrast to male migrants, only 27% of female migrants are married. On the other hand, 42% are divorced, separated, abandoned or widowed. Most older women migrants fall into this category. A sizable group of women thus has the responsibility of being the head of their own household but have to migrate to South Africa in order to ensure the survival of the household. Over 40,000 young, mostly single, women are internal migrants working in Lesotho’s textile factories. The textile workers have been called the ‘new miners’ though wages in the factories are paltry compared with the mines. If the textile industry did not exist, or closed down, then most of these women would probably migrate to South Africa. Most migrants who work outside mining are irregular migrants as the South African government is reluctant to give them work permits. This increases their vulnerability to exploitation. Many women are in South Africa on 30-day visitor’s passes and are supposed to return to Lesotho every 30 days to renew them. If they do not, they have to pay a “fine” when they eventually return home. Changes in the profile of migration from Lesotho have impacted on remittance flows in a number of ways: The decline in mine employment has not led to a decrease in remittance flows to Lesotho. On the contrary, total remittance flows increased as a result of increases in mine wages. But rising remittance flows are directed to a shrinking number of households thus increasing inequality between households and accelerating levels of poverty and food insecurity for households that do not have a mineworker. Female domestic workers in South Africa remit less to Lesotho than male miners. This is primarily because they earn about a third as much as their male counterparts. Domestic workers are notoriously exploited in South Africa. Some migrants have second families or partners in South Africa. In the case of male migrants, this tends to reduce the amount remitted to Lesotho. In the case of female migrants, it often increases the flow of remittances as they are able to remit some of their partner’s earnings back home as well. The vast majority of cash remittances flow through informal channels (usually carried by hand). Only 5% of migrants use the Post Office and 2% the banks to remit. Remittance-receiving households in Lesotho tend to use most of the remittances for basic needs: Migrant remittances form an important, and in many cases, the only, source of income for migrant-sending households in Lesotho. Over 95% of the households with male migrant members and 90% with female migrant members list remittances as a source of household income. Fewer than 10% list income from the second-ranking income source, non-migrant wage labour. Most households (89%) say that the contribution of remittances to household income is important or very important. Remittances are also key to having enough food in the household (with nearly 90% saying that it is important or very important). The most common use of remittances is for food (90% of households spend remittances on food), clothing (76%), school fees (56%) and fares for transportation (34%). Almost three quarters of households do not invest remittances in agriculture. Of those that do, a quarter spend remittances on seed, 18% on fertilizer, 12% on tractors and 4% on livestock. Nearly 19% of households put some remittance income into savings. Other expenditures such as funerals (incurred by 16% of households) and funeral and burial insurance policies (29%) reflect the impact of HIV and AIDS. Households with female migrants are more likely to supplement remittance earnings with other sources of income. Remittances are not used on luxury consumer items but are used, directly or indirectly, to meet the household’s subsistence needs. The proportion of households investing remittances in formal or informal business is extremely low. In the rural villages, remittances are often “pooled” by women through burial societies, grocery associations and egg circles. As well as loaning money to be paid back with interest, the associations buy food and groceries in bulk to divide up among members. Remittances are essential to household survival in Lesotho but the opportunities for investing remittances in productive, developmental activities are very limited. This suggests that it is important to stop seeing Lesotho as the only site for entrepreneurship by migrants from there. Companies from all over the world are permitted to come and do business in South Africa. The same opportunity should be afforded to Basotho households. Basotho should also be freely allowed to do business in South Africa. Instead, migrants are more often viewed as a threat and undesirable. Migration needs to be re-thought as something that is mutually beneficial for both countries. The only realistic option is to open the borders for unrestricted travel in both directions and to allow Basotho to pursue economic opportunities in South Africa free of harassment and deportation

No. 44: Migration, Remittances and Development in Southern Africa

Remittances by migrants are now a focus of attention of governments and development agencies worldwide. Globally, cash remittances by international migrants now exceed $250 billion per annum, easily outweighing the value of development assistance. Over a third of remittances to developing countries originate in other developing countries. International cash remittances are only part of the story. Remittances in the form of goods and commodities are also extremely important, as are internal remittances from urban to rural areas within countries. Debate rages on the development impacts of remittances and how these can be maximized. Advocates of migration as a positive force in development highlight the role of remittances in poverty alleviation in developing countries. Others view migration as having an essentially negative impact on development and poverty reduction, for three reasons. First, there is the difficulty of converting remittances into sustainable productive capacity. Second, remittance income is rarely used for productive purposes but for direct consumption. Very little is directed to income-earning, job-creating investment. Finally, remittances increase inequality, encourage import consumption and create dependency. These opposing views frame much of the contemporary debate about migration and development. In the Southern African context, this debate has been difficult to resolve because so little is known about remittance flows and usage. In response, SAMP devised the Migration and Remittances Survey (MARS) to provide nationally-representative data on remittance flows and usage at the household level for 5 SADC countries: Botswana, Lesotho, Southern Mozambique, Swaziland and Zimbabwe. Subsequent rounds will expand the range of countries studied. Since most cross-border migration in Southern Africa is to neighbouring countries, the bulk of remittance flow is within the region itself. That is not to say that remittances are not received from outside the region. South Africa and Zimbabwe, in particular, have large overseas diasporas. One recent survey of Zimbabweans living in the United Kingdom, for example, found that 75% regularly remitted funds back home, most to support family members. With regard to intra-regional remittances transfers, the primary source countries for migrant remittances are South Africa and, to a lesser degree, Botswana. SAMP partners led research teams in the five countries using the same questionnaire. Households were randomly selected and were included in the survey only if they had cross-border migrant or migrants. The MARS survey collected two different types of data: household data and individual data. Household data was collected from households with current or past cross-border migrants. In total, 4,700 household interviews were conducted in the five countries and information on almost 30,000 people was collected. A similar sampling methodology was implemented in each country. The individual data includes cross border migrant information as well as information on other people living in the household. As well as providing unprecedented insights into remittance flows and usages, the MARS data provides an important contemporary profile of who the migrant population is in Southern Africa. The main features of this profile are as follows: Despite evidence of the growing feminization of migration globally, most migrants continue to be male. In Botswana, Mozambique and Swaziland over 80% of migrants are male (84.5%). Most female migrants are from Zimbabwe (44% of the total from that country) and, to a lesser extent, Lesotho (16%). The Zimbabwean pattern has changed appreciably in the last decade in response to internal political and economic conditions and the declining socio-economic position of women. In the Lesotho case, commentators have remarked on the growth in female migration in response to job loss and retrenchment in the South African mining sector. While this may be responsible for the relatively higher proportion of female migrants from Lesotho, it does not negate the finding that overall the vast majority of Basotho migrants have been and continue to be male. Traditionally, migration streams were dominated by the young and unattached. In this survey, only 7% of migrants were under the age of 25. In contrast, 41% were over the age of 40. Migration, in other words, has become a livelihood strategy of the middle-aged. At the same time, the survey picked up very little evidence of widespread cross-border children’s migration. Three quarters of migrants under the age of 25 came from only two countries: Zimbabwe and Mozambique. Only 26% of migrants were unmarried and as many as 62% were married. The survey identified few migrant widows (3%) nor a particularly large number of divorced or separated migrants (again 3% of the total). The majority of the migrant widows were from Lesotho. Not only are more migrants older and married, many are also heads of households. Just over half the migrants were actually household heads rather than ordinary members of the household. In Botswana and Lesotho, for example, household heads make up over 70% of the total migrant flow. In Swaziland household heads were still in the majority (58%) but in Mozambique and Zimbabwe they were still very much in the minority (at 36% and 28% respectively). A few decades ago, sons and some daughters would have made up virtually all of the migrant stream. Migration is now clearly a career rather than a passing phase in most people’s working lives. The only thing that has probably not changed that much in recent years is the educational profile of most intra-regional migrants. This survey showed that 15% of migrants had no education (50% of those from Botswana suggesting that in that country there are opportunities other than migration for the educated). The other major anomaly is Zimbabwe. Here, as might have been predicted, very few migrants have no schooling at all. Forty six percent have secondary education and 44% postgraduate education of some kind or another. Twenty two percent hold graduate or post-graduate degrees. Many migrant sending households across the region have a migration ‘tradition’ which is passed from one generation to the next (usually but not exclusively fathers to sons). Many migrants come from families where parents and even grandparents have worked outside the home country. About 50% of migrants reported that their parents had been cross-border migrants; the percentages were highest in Lesotho (76%) and Mozambique (66%). Lesotho (24%) and Mozambique (44%) also had the highest percentages of grandparents who had been cross-border migrants. The most popular destination for parents and grandparents was South Africa. South Africa plays a central role in the cross-border migration picture with 86% of the total number of migrants currently working there. The proportion is over 95% in all countries except Zimbabwe. In other words, as expected, this is a story of intra-regional migration and South-South remittance flow from an economically-dominant nation to its poorer and smaller neighbours. Only 33% of Zimbabwe migrants work in South Africa, 17% are in Botswana and about 40% work in countries outside SADC. Minework was the most frequently cited occupation of international migrants from Botswana, Lesotho, Mozambique and Swaziland, despite the recent decline in job opportunities in that sector in South Africa. However, migrants from all four countries are scattered across a variety of other employment sectors and job niches. Skilled and unskilled manual work (17.5% of Mozambican migrants and 13.9% of Swazi migrants); domestic work (9% of Basotho migrants) and trader/ hawker/ vendor (6% of Mozambican migrants) were the most common. A smattering of skilled migrants were picked up from most countries. They included professional workers (4.8% of the total sample), office workers (2.4%), health workers (2.3%) and entrepreneurs (2.2%). In the main, however, the survey showed that the traditional forms of migration to South Africa still dominate with some diversification. In addition, most migrants are still in unskilled and semi-skilled categories. The survey picked up no evidence of a massive skills drain to South Africa, confirming previous observations by SAMP in this regard. Migrants maintain strong links with home, although their ability to return regularly is influenced by many factors such as how far they must travel, and cost and availability of transport. An average of 30% of migrants return home monthly, another 13% return home once in three months, 19% only make it home once a year and about 11% come home less often. Mozambique migrants seem to return home less often than migrants in the other countries (43% once a year); Lesotho migrants come home the most often (56% monthly). SAMP has adopted the concept of the “value-package” in analyzing remittance flows. In other words, remittances are viewed as a combination of cash and goods transfers. With regard, first, to cash transfers, the survey found the following: The vast majority (85%) of migrant-sending households receive cash remittances. This ranges from a low of 64% of households in the case of Swaziland to a high of 95% in the case of Lesotho. The proportion of migrant-sending households receiving remittances in the form of goods is more varied, from a low of 17% in the case of Swaziland and 20% in Lesotho to a high of 65% in Mozambique and 68% in Zimbabwe. The annual median amounts of money remitted to migrantsending households by country are: Botswana (R8,306), Lesotho (R7,800), Mozambique (R1,760), Swaziland (R4,800) and Zimbabwe (R1,093) . In terms of frequency of remittance, about 80% of migrants say they send cash remittances at least once every three months; Botswana (62%), Lesotho (77%) and Swaziland (71%) have the highest percentages who say they remit once a month. In every country remittances were a source of income for the majority of households. The figure was highest in the case of Lesotho (95% of households receive cash and 20% receive goods remittances), followed by Zimbabwe (84% and 68%), Mozambique (77% and 65%), Botswana (76% and 53%) and Swaziland (65% and 17%). The importance of goods remittances to households in Mozambique and Zimbabwe is noteworthy. Interestingly, for those who continually stress the importance of agriculture (and ignore migration) in rural development, relatively few households in each country reported income from the sale of farm produce, Mozambique was the highest at 21% of households, followed by Swaziland (9.5%), Zimbabwe (7%), Botswana (5%) and Lesotho (3%). In these countries, therefore, remittances easily outstrip agriculture in relative importance (as measured by the percentage of households receiving income from these sources). Just 237 of the 3246 households receive any income from the sale of farm products, averaging only R1541 per annum. Across the region as a whole, annual median income from wage employment and cash remittances is the same (at R4,800), followed by business income (R2,400), pensions (R2,038), casual work (R1,200), and remittance of goods (value R911). When cash and commodities are combined, however, the value of remittances exceeds all other forms of income. The median income from cash remittances is highest for Botswana (R9,229), followed by Lesotho (R8,400) Swaziland (R2,400), Mozambique (R1,980) and Zimbabwe (R1,093). Remittances in the form of goods amount to a value of R2,307 in Botswana, R1,257 in Mozambique, R1,000 in Lesotho, R600 in Swaziland and R549 in Zimbabwe. In other words, goods remittances are relatively more important in Mozambique. Considerable attention is given in the remittance literature to the methods that migrants use to remit and the expense involved in remitting, through both formal and informal channels. The main policy recommendations that come out of the identification of this problem is that governments and institutions at both ends should lower the transaction costs of remitting, as well as make it easier for migrants to access and use formal channels through reform of banking and other financial regulations. In the case of Southern Africa, most migrants are relatively satisfied with the methods they use. However, here geography plays a significant role. Most migrants work in neighbouring countries and return home relatively frequently. Unsurprisingly, personal transfer of cash and goods is easily the most important channel. The most popular ways of bringing money home are for the migrants to bring it themselves (average 47%), send it via a friend/co-worker (average 26%) or through the post office (average 7%). As with cash, the two most popular ways of transporting goods home are to bring them personally (average 66%) and via a friend or co-worker. It is hard to see how transaction costs on personal transactions can be reduced unless the reason for return home is only to transfer remittances, in which case transportation costs make this a very costly means of remitting. A central question in debates about the developmental value of remittances is how households actually spend this income. In the countries surveyed: Food and groceries are by far the most important expenditure (93% of households purchased food), followed by transportation (44%), fuel (44%), utilities (38%), education (31%) and medical expenses (30%). Certain categories of expenses are more important in certain countries. Education (primarily school fees) is important in Zimbabwe (57%) and Mozambique (44%); medical expenses are important in Zimbabwe (40%), Swaziland (39%) and Mozambique (31%); savings is important in Zimbabwe (36%) and Botswana (28%); housing is a major category only in Zimbabwe (46%); clothes is a major category in Lesotho (73%) and Zimbabwe (54%); farming expenses are important only in Swaziland (39%). When the actual amount spent by category is compared, the largest median amounts are spent on building (R576), farming (R434), clothes (R267), food (R288), and special events (R239). Building is the largest median expense category in all five countries with food expense second in Lesotho (R400) and Mozambique (R251), third in Botswana (R346), fourth in Zimbabwe (R64) and fifth in Swaziland (R300). However, looking only at the amount spent on such items as building and special events costs skews the picture somewhat because these expenses affect relatively few households. When the computed weighted value of expenditure items is compared, the major importance of food as an expense category is revealed. It is the most important expense item in all five countries. Depending on the country, between 2 and 6 times more money is spent on food than the next most important expense item which highlights the importance of the food expense for migrant sending households. As indicated above, migrant-sending households in the countries surveyed spend the greater proportion of total income on food purchase. Other necessities, clothing, medical expenses, shelter, fuel and utilities consume the bulk of the rest. In other words, consumption spending (for necessities not luxuries) constitutes the pre-dominant usage of household income, a pattern observed in many other parts of the world. Across the five countries, the most common expenditure items for remittance money are food (90% of households), school fees (52%), clothing (52%), and fares (transportation) (34%). The rank order changes a little for different countries but the items remain about the same. Certain categories of remittance contributions are more important in certain countries. In Swaziland farming items (seed, fertiliser, tractor) are important and seed is also important in Lesotho and Mozambique. In Botswana remittance money is used for cattle purchase (21%). Although of less importance, remittance money helps with many other expenditure items such as building materials and funerals. In all of the countries, except Lesotho, a significant number of households “invest” in children’s education. Swaziland is the only country, however, in which household income is invested in any significant degree in agricultural activity. Nearly two thirds of the households that invest in agriculture across the five countries are in Swaziland. The importance of remittances for food is further emphasized by the ratings given to various items. Further dramatic proof of the importance of remittances to household food security and other basic needs is provided by a tabulation of the types of goods that migrants send home. There is little evidence of luxury goods being remitted, Instead, clothing (41% of households) and food (29%) are clearly the items most frequently brought or sent (Table 22). Mozambican migrants bring more building materials than migrants in other countries (for example, roofing 16% and cement 9%) and Zimbabwean migrants are the only ones who have a significant percentage of goods for sale (14%). The survey showed very little evidence of re-investment of income (remittance and otherwise) in entrepreneurial or other income-generating activity. Finally, many migrant sending households do not have savings. Indeed, given the low incomes of many households, it is not all that surprising that many households report borrowing money during the previous year. The Lesotho percentage is highest (69%) but between 42% and 49% of households in the other countries say they borrowed money. Clearly migration and poverty are closely related in this region. The migrant-sending households of Southern Africa are generally poor although the degree of poverty does vary. Migration is a livelihood strategy of the poor. Remittances in cash and kind keep poverty at bay but they do not do much else. There is very little evidence, as yet, that remittances in Southern Africa have developmental value, as conventionally defined. Equally, they are critical for poverty alleviation in many households

No. 69: Calibrating Informal Cross-Border Trade in Southern Africa

Informal cross-border trade (ICBT) is a significant feature of regional trade and international mobility in Southern Africa. The exact number of participants and economic importance of this trade is unknown because no official statistics are collected. Despite its obvious presence at every border post throughout the SADC region, ICBT remains largely invisible to policy-makers. Indeed, in government circles it is more often associated with smuggling, tax evasion and illegality than with innovation, enterprise and job creation. On the research side, there is a growing body of case study evidence that ICBT plays a critical role in poverty alleviation, food security and household livelihoods in Southern Africa. But its overall character and significance is unknown. With this in mind, SAMP initiated a project to examine cross-border regional trade at a selection of important border posts throughout the region. This research led to a number of country reports that provided rich insights into ICBT in particular countries. This report combines the data collected by each of the country teams and analyses the data set as a whole. The first issue addressed in the report is whether ICBT traders are a homogenous group. The research shows that this is far from being the case and that more attention needs to be paid to different types of traders and trading activity. Second, the report examines the activities of cross-border traders including the types of goods traded, the sources of those goods and where they are sold. While the majority of traders purchase goods from formal outlets in their countries of destination, most of these goods enter the informal economy on their return home. Third, the report examines financial transactions at the borders showing that most traders pay extremely small amounts of duty, which hardly justifies the effort of collecting it. On the other hand, only a small minority collect the VAT they are owed when they leave the country of purchase. Finally, the report itemizes the problems and challenges faced by informal traders when crossing borders. In total, the SAMP survey covered 20 land border posts connecting 11 Southern African countries using a threefold methodology. First, all people crossing through the selected border posts were monitored over a 10-day period and the number of ICBT traders counted. Second, the interactions of traders with customs officials were observed and the types, value and volumes of goods declared and duties paid were recorded. Third, a sample of traders was interviewed using an origin and destination (O&D) survey. During the course of the exercise, more than 205,000 people, including 85,000 traders, were counted passing through these border posts. The transactions of over 5,500 traders with customs officials were monitored and over 4,500 traders were interviewed. The study demonstrates that informal cross-border is a complex phenomenon and not uniform across the region, or even through border posts of the same country. However, the overall volume of trade, duties paid and VAT foregone, as well as the types of goods and where they are produced, indicate that this sector of regional trade should be given much greater attention and support by governments of the region as well as regional organizations such as the Common Market for Eastern and Southern Africa (COMESA), SADC and the Southern African Customs Union (SACU). The major findings at the regional level were as follows: Demographically, women comprise a significant proportion of traders and constitute the majority of traders crossing through nearly half of the border posts surveyed, including one of the busiest at Beit Bridge between South Africa and Zimbabwe. At the same time, an unexpectedly large number of men were also involved in ICBT. Malawi and Zambia had significantly more male than female traders, for example. Most ICBT is bilateral in character; that is, traders tend to operate between their home country and one other country. Trading into a third country is comparatively rare. At the same time, the vast majority of traders crossing into a country with goods to sell are citizens of that country. ICBT by traders of other nationalities is uncommon. Although South Africa is a major source of goods purchased by traders, the absence of South African informal traders was very noticeable. The reasons why South Africans do not participate in ICBT requires further exploration but it stands in marked contrast to formal sector regional trade where South African companies predominate. ICBT is a neglected market opportunity for small-scale South African entrepreneurs and the obstacles to their participation need to be better understood. The majority of traders travelled frequently to other countries for short visits (sometimes for less than a day) to buy goods to sell in their home country, or to sell goods that they had bought for that purpose in their home country. Only 13% of respondents bought and sold goods while travelling (two-way trading). Frequency of tracel also varied both within and between countries, with traders in the Namibian (42%) and Zambian (25%) surveys being most likely to travel every day. Others travel at least once a week (Mozambique, 67%; Zambia, 34%). Some travel less frequently, but at least once a month. Very few stay more than a month in another country. The types of goods carried by informal cross-border traders vary widely, but at most borders the trade was dominated by food, especially groceries and fresh produce. Again, there was considerable variability at different borders. New clothes, household and electrical goods comprised a significant proportion of the stock of some cross-border traders. Other goods identified in the survey included second-hand clothing, petrol, alcohol, car parts and construction materials. Traders mostly source their goods from the formal sector of destination countries. A small proportion obtain their goods from informal markets in other countries. Many traders acted as wholesale importers of goods, selling the goods they carried across borders to vendors in informal markets. Others sold from their own stalls in informal markets, door to door, or to networks of family, friends and other individuals. A small proportion sold to retailers and restaurants in the formal sector. The value of goods carried by traders indicates the complexity and diversity of this sector. A significant cohort of traders appeared to be survivalists as many said they carried less than ZAR500 worth of goods. However, at least some of these traders travel frequently with low-value loads, rather than infrequently with high-value loads. Most traders travelled with loads in the range of ZAR1,001-5,000. A small cohort of traders travelled with loads worth more than ZAR15,000. Informal traders make a relatively significant contribution to duties collected at border posts. During the 10-day survey period at the 20 border posts, ZAR3,750,000 was collected from 1,780 traders. Duties collected varied between and within border posts. In some surveys the value of duties paid per trader was less than ZAR50. Interestingly, duties were being incorrectly collected at some borders between Southern African Customs Union countries (for example, between Botswana and Swaziland and South Africa). Traders said they were willing to pay duties, but wanted amounts reduced and the process to be more transparent. Although most traders buy their goods in the formal sector, few claim VAT when leaving the country of purchase. Many did not know they could do this while others said that the systems are too complex and time consuming. Traders who do not claim VAT back make an unintended contribution to the fiscus of the country where they buy their goods. Responses to questions about treatment from officials at the borders were generally positive but varied between and within border posts. Larger and busier posts generally received less favourable reviews. The scope and scale of informal cross-border trade across the SADC suggests that it makes a significant contribution to regional trade and the retail economies of the region and is consistent with the stated aims of both the SADC and COMESA to promote intra-regional trade. Small-scale cross-border trade could, if promoted and supported, provide a route to the development of pro-poor trade policies that could have a direct impact at the household level. If trade policies for the region are to be successful, the activities of these entrepreneurs need to be included in planning processes. ICBT comprises a significant component of regional economic activity for most countries in Southern Africa. It is highly visible at border posts throughout the region. Only amongst policy-makers and governments does it remain largely invisible