The paper
Civil conflict can disrupt neighboring economies through cross-border trade, with very different consequences for formal businesses and informal traders. This article combines Ugandan customs records with surveys of informal trade to examine the effects of the South Sudanese civil war.
Research findings
- The preferred estimates put the reduction in Uganda’s informal exports to South Sudan at close to 80%, compared with about 12% for formal exports.
- The fall in formal exports was concentrated in industrial goods; formal agricultural exports continued to flow through conflict-affected borders.
Policy takeaways
- Assess the regional costs of conflict using informal trade data as well as customs records: aggregate formal trade can miss severe losses in border communities.
- Target support and safe trading conditions to small cross-border traders, whose exposure to insecurity can be much greater than that of formal firms.