duties. If serious reforms of these public enterprises were undertaken, a case could also be made for external support, for example to settle pension claims and pay off redundant staff.

**Capacity restrictions on “canotiers” should be abolished or relaxed.** This, in combination with setting up and monitoring of safety guidelines for the liberalized transport market, possibly under the auspices of CICOS, would constitute a quickly implementable first step toward improving passenger transport across Malebo pool.

**There is evident scope for simplifying travel for passengers and to facilitate formal trade of non-bulk products (i.e. those transported by individual traders).** Much petty cross-border trade currently occurs informally by dugout canoe. If such traders were persuaded via trade facilitation measures to switch to formal trade channels, the public coffers would benefit, and trade could be more effectively monitored. Such trade facilitation measures should aim at:

- the assignment of **separate terminals for simple travelers and for traders** , possibly by opening a second “beach” in each of the two capitals, managed by private operators, as outlined above

- issuing of **concessions to private operators for transport of small-scale traders**

- **upgrading of ferries** to allow goods transport in better conditions

**An additional, more ambitious, and probably even more efficient approach, would be to limit border controls to the point of embarkation** , by allowing the destination country’s agents to operate at the point of departure (similar to US controls at Canadian airports). If seriously supported by the two governments, external technical support could help in undertaking such steps. By demonstrating willingness to act on facilitating economic reform across Malebo Pool, the two governments might also be able to signal their good intentions to international donors and thereby generate further external support.

# **6. CONCLUSIONS**

**Our report highlights the strategic economic importance of the Kinshasa-Brazzaville conurbation, both through its sheer population size and through its position as the regional transport hub.** We have provided evidence to support the view of the river crossing between the two capitals as a major bottleneck: traffic volumes are small, transport costs are high, administrative obstacles abound, and cross-border differentials in retail prices are significant.

**We find bilateral official trade volumes between DRC and RC to be derisorily small.** Formal trade between DRC and RC is lower now than in the 1980s. Recorded transit trade volumes are small too, mainly from Matadi to Brazzaville. However, we have also found evidence of significant informal trading activity. It is impossible to accurately quantify the volume such trade.

**We observe statistically significant price differences between markets in Kinshasa and Brazzaville.** While we observe no significant price differentials within cities, shipping goods across the river appears to systematically increase retail prices in both cities. This points toward unexploited arbitrage opportunities.

**We also find substantial potential for cross-border trade in locally produced goods** , based on our company survey. We estimate that a general reduction in general trade costs would stimulate exports even more than imports, and thus improve the trade balances of DRC and RC. Trade

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