Dissertation (MA International Relations)
Entrepreneurship in East Africa is in its infant stage and is growing rapidly. The most important entrepreneurship area is the development of small scale entrepreneurs (SSEs), the sector which is facing several challenges due to economic instability of the East African countries. This study aims to investigate the impact of the use of differential currencies on the performance of cross border SSEs in East African Community, a case of Namanga border. Data for this study were collected using field observation, questionnaires and interview. The study showed that there was a good performance in daily businesses of the cross border SSEs in which 77% of the 31 money vendors and 57.1% of the 70 other SSEs respondents ranked the cross border business as good and above. Also the data revealed that, the cross border SSEs stay longer in the business and the businesses attract more new recruitments. It was also observed that there was currency loss and gain for SSEs when calculated by spot exchange rate and through SSEs responds, whereby money vendors gain while other SSEs lose about 2 TShs for each 1 KShs in exchange, and even more through buying commodities from Kenya side. Furthermore, in currency volatility when compared to the United States of America Dollar (US Dollar), 77% of respondents showed that Tanzania currency is more volatile than Kenya currency. That means the currency and economy of the studied East African countries is more unstable than the US Dollar, and hence resulted in SSEs income fluctuation. The SSEs in cross border business face various challenges including the use of difference currency, lack of SSEs knowledge and skills, common market and social services. As such, the use of common currency, establishment of common market and SACCOS, entrepreneurship training as well as soft loan availability could be an opportunity for improving the performance of cross border SSEs businesses in particular at Namanga border.