Cooperation and Management of Formal and Informal Trade for Promotion of Development in Africa: a Case Study of Kenya and Tanzania

Abstract

In the international system, state actors form bilateral cooperation for various reasons such as economic development and security. The study analyzed formal and informal trade cooperation between Kenya and Tanzania and its impact on development. International cooperation especially between immediate neighbouring countries plays a significant role in the trade sector by filling the gap left behind by lack of formal institutions. The study was guided by three specific objectives. These included; analysing the effect of customs procedures and non-tariff barriers on trade between Kenya and Tanzania, examining how technical regulations cooperation affect the level of trade between Kenya and Tanzania and evaluating how transparency of trade management laws affect the level of trade between Kenya and Tanzania. The study was anchored on the “soft power” theory. Data was obtained from books, e-books, journals, government publications, magazines and questionnaires. The collected data was analysed thematically so as to establish the effect of cooperation and management of formal and informal trade for promotion of development in Africa. From the collected and analysed data, it was evident that found that there exists an electronic continuous exchange platform that ensures an uninterrupted clearance of trading goods across the borders and that there are various other custom procedures and non-tariff barriers between the two countries including joint investment in parking sheds and parking yards, harmonized export licenses and established communication between the NTB focal points in each country. Additionally, other transparency measures to enhance formal and informal trade between the two countries according to the study findings include transparency in government policies relating to trade, equal treatment of either country products or minimum favoritism in government officials decisions. The study findings generally show that there are various strategies implemented by the governments of the two countries aimed at facilitating cross border trade through transparency of laws, regulations and administrative rulings.