Time to end informal sector fronting

The Monitor Editor | Thursday September 19, 2024 10:48

The Francistown Umbrella Informal Sector chairperson, David Mbulawa, has highlighted this growing concern, revealing that many local traders are using their licences to facilitate the entry of foreign goods into the market at a fee.

Fronting undermines the very fabric of our local economy. It allows foreign traders to exploit the system designed to benefit Batswana, using local licences to cross borders and sell goods at prices intended for local traders. This not only distorts market dynamics but also deprives genuine local entrepreneurship opportunities to thrive. The goods, once across the border, are sold by local traders on behalf of foreigners, who in turn pay them for this service. This arrangement often comes to light only when disputes arise between foreign traders and local licence holders.

Efforts to curb this illegal practice have been met with limited success. Reports to council by-law offices often result in the interception of goods, only for them to be quickly released, sometimes through corrupt means. This cycle perpetuates the problem, allowing foreign traders to continue their operations with the aid of local fronts.

In 2022, a resolution was made to impose severe penalties on local traders found guilty of fronting. However, enforcement remains a challenge. Assistant Minister of Trade and Industry Beauty Manake has acknowledged the difficulty in policing the reservation policy, as many locals continue to lend their licences to foreigners. This practice not only violates the Industrial Development Act of 2019 but also hinders the government’s efforts to increase the participation of native Batswana in all sectors of the economy.

The government, through initiatives like the Citizen Entrepreneurial Development Agency (CEDA), is committed to providing financial support to Batswana, enabling them to operate their businesses independently. Yet, the persistence of fronting indicates a deeper issue: the lack of startup capital for many locals, forcing them to lease their businesses to foreigners.

It is imperative that we, as a community, take a stand against fronting. Local traders must recognise the long-term damage this practice inflicts on our economy and the opportunities it steals from genuine entrepreneurs. We need stricter enforcement of existing laws and more robust support systems to empower local traders.

Community leaders, government officials, and citizens must work together to eradicate fronting. By doing so, we can restore integrity to Francistown’s informal sector, ensuring that it serves the interests of Batswana and fosters genuine economic growth. Let's commit to building a fair and thriving market that benefits all, free from the shadows of fronting.