The Relationship between Required Trade Documentation and the Choice of Cross-Border Trade Patterns a Case of Registered Maize Traders at Busia Border Post

Oketch, Samuel Apondi (2015) The Relationship between Required Trade Documentation and the Choice of Cross-Border Trade Patterns a Case of Registered Maize Traders at Busia Border Post. Masters thesis, University of Nairobi.

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Abstract

Among the wide range of regulatory requirements facing traders, documentation procedures have often acted as an important barrier to formal trade contributing to raising Trade Transactions Costs (TTCs). Whereas concluded studies highlight the bottlenecks faced by traders in the documentation procedures such as bureaucracy and high costs as constraints to growth of formal cross-border trade, there is a gap in the literature that sufficiently speak to the relationship between the complex documentation procedure and the choice of informal trade patterns with reference to border posts. The overall research objective of this study is to investigate the relationship between complexity in trade documentation and the patterns of trade chosen by registered maize traders at the Busia border post. In order to achieve this objective, a survey of fifty-five traders engaging in cross-border trade activities was conducted through the use of probability sampling technique. Also, different stakeholders and government agencies were purposively selected as key informants. Data was collected by use of face to face administered questionnaires, key informant interview guide and direct observation. Key informants‟ data were thematically analyzed using Microsoft Word Tables while data from traders were coded and entered into SPSS for analysis. The study found that required trade documentation partly influences the choice of informal cross-border trade patterns due to constraints such as accessibility and costs which increase trade transaction costs. It also established that the high illiteracy levels among cross-border traders contributes to lack of adequate market information which is linked with issues of accessibility hence exposing them to exploitation by unregistered clearing agents and brokers. It was further observed that importation through informal routes, inflow and outflow of unrecorded small volumes of goods coupled with diversion of trade flows from the formal trade routes comprise the main observable informal cross-border trade patterns. The study also found that inter-community trade and extended family relations play an important role in the growth of informal trade at the border point. Overall, the study indicates that the growth of informal cross-border trade is a result of a host of factors. The study concludes that despite the fact that complexity in the documentation procedure partially correlates with the choice of trade patterns, in the same measure does informal trade grow especially in the absence of formal contracts and adequate market information; when other important obstructions to formal trade prevail and when trust-based networks such as extended family or inter-community networks are left to link markets, although informal. To enhance the growth of formal trade, the study recommends that it is important to sensitize and educate the traders so as to increase their level of awareness and understanding of vital trade regulations and documents, help them appreciate the benefits of conducting formal trade and harmonization of trade documentation between Kenya and Uganda so as to facilitate formal regional trade.

Item Type:	Thesis (Masters)
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HN Social history and conditions. Social problems. Social reform
Divisions:	Africana
Depositing User:	Mr Nahum Osman
Date Deposited:	17 Jun 2016 10:19
Last Modified:	08 Jun 2017 11:44
URI:	http://thesisbank.jhia.ac.ke/id/eprint/498

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