Kenya’s informal cross-border trade contracted by 16.7 percent between December 2024 and June 2025, falling from KSh299 million to KSh249 million, the 2025 Informal Cross Border Trade Survey Report by the Kenya National Bureau of Statistics shows.

The contraction was attributed to seasonal fluctuations in agricultural commodities and reduced cross-border market activity that shifted Kenya’s informal trade balance from a surplus of KSh20.4 million in December to a deficit of KSh1.1 million six months later.

KNBS said this decline was driven by a 22.3 percent drop in informal exports, which fell to KSh124 million, while imports declined at a slower rate of 10.2 percent to KSh125 million.

“The results indicate a general slowdown in informal cross-border trade volume between the two periods, mainly attributed to seasonal variations in agricultural production and reduced cross-border market activities,” KNBS report notes.

Food and live animals dominated informal trade during the period, accounting for 37.9 percent of exports and 78.5 percent of imports in June 2025, underscoring the sector’s critical role in regional food security.

Moyale border point remained Kenya’s leading informal export corridor, recording KSh51.9 million in outbound trade, followed by Suam, a key crossing between Kenya and Uganda, which recorded at KSh24.7 million in exports. 

However, the pattern reversed sharply on the import side. Namanga (Tanzania) emerged as the primary entry point for informal imports at KSh27.6 million, overtaking Mandera (Somalia) which had led in December with KSh44.2 million.

Meanwhile Tanzania overtook Ethiopia as the leading source of informal imports by June 2025, accounting for 47.2 per cent of total informal imports into Kenya, driven primarily by food commodities. 

Ethiopia remained the largest destination for Kenya’s informal exports, absorbing 54 percent of total outbound flows. Uganda accounted for 29.1 per cent of informal export destinations.

The survey, conducted across 12 border stations, revealed significant trade imbalances at several key crossings. Suam recorded the largest surplus of KSh23.8 million, while Namanga registered the deepest deficit of KSh17.2 million, reflecting strong import demand. Taveta recorded a deficit of KSh10.8 million.

Male dominance

Men continue to dominate informal cross-border trade, accounting for 79.7 per cent of respondents in June 2025, up from 77.2 per cent in December. Female participation declined from 4,086 to 2,663 over the period.

“Although female participation decreased over the two periods, some stations, particularly Lwakhakha and Taveta, recorded relatively higher female respondents in June 2025 compared to other locations,” the report notes.

Traders aged 25 to 44 years formed the majority in both survey periods, representing 62.4 per cent of informal traders in June. Primary school education was the highest level attained for 46 per cent of traders, while 29 per cent had secondary education. Married traders accounted for more than three-quarters of respondents.

Transport evolution

Motorbikes have become the predominant means of transport for informal trade, with 43.5 percent of respondents using them in June 2025, up from 37.4 per cent in December. KNBS said this shift reflects a gradual formalisation of logistics in informal trade activities. Vehicles transported KSh37 million worth of informal exports in June, while head and hand carriage remained significant for small-scale traders.

The growing use of motorised transport, the report notes, reflects “gradual formalization of logistics in informal trade activities.”

Policy implications

Informal cross-border trade now accounts for approximately 1.3 percent of total exports and 2.7 percent of total imports, according to the comparative analysis with formal trade data. Uganda remained Kenya’s largest formal export market at KSh12.4 billion, while Tanzania led formal imports at KSh5.1 billion in June.

The report also calls for “policy interventions to transition informal traders toward formal market participation through training, simplified customs procedures, and cross-border trade infrastructure.”

Kenyan authorities have acknowledged the economic cost of informal trade. Health Cabinet Secretary Aden Duale recently called for the reopening of the Kenya-Somalia border, noting that billions in customs revenue are lost annually as trade continues through unofficial channels. “It is not closed; it is only closed on paper,” Duale said.

The ICBT survey, conducted twice annually since 2011 in partnership with the Central Bank of Kenya, the Kenya Revenue Authority, and the State Department for Trade, is designed to capture transactions that fall outside official customs records. 

“The information generated is critical for monitoring sector performance and developing evidence-based trade policies,” the report states.

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