The five-day AfDB Group 2026 Annual Meetings kicked off in Congo Brazzaville on Monday under the theme “Mobilizing Africa’s Development Financing at Scale in a Fragmented World”.
The report titled “Trade Finance Supply in Africa: Post-COVID Trends and Emerging Opportunities” estimated that unmet demand for trade finance in Africa remained between $74 billion and $92 billion in 2024, highlighting one of the continent’s biggest obstacles to expanding trade, industrialization, and regional economic integration.
The AfDB warned that escalating geopolitical tensions and disruptions to key shipping routes could widen the financing gap again towards the more than $100 billion level recorded in 2017, undermining efforts to boost intra-African trade under the African Continental Free Trade Area (AfCFTA).
According to the report, only around 25 percent of Africa’s trade is currently supported by bank-intermediated trade finance, compared to 38 percent before the COVID-19 pandemic, reflecting persistent structural constraints and foreign currency shortages across many African economies.
Intra-African trade struggles to regain momentum
The report showed that bank-intermediated financing for intra-African trade recovered to $98 billion in 2024 after peaking at $110 billion in 2023, compared to only $61 billion in 2020 during the height of the pandemic.
However, intra-African trade represented only 14 percent of total African trade on average between 2020 and 2024, down from 17 percent during the 2015-2019 period, highlighting the challenges facing regional economic integration.
The AfDB said initiatives such as the AfCFTA, the Pan-African Payment and Settlement System (PAPSS), and regional trade finance programmes are helping improve access to financing and reduce barriers to cross-border trade, but progress remains uneven across the continent.
Meanwhile, Africa’s trade with the Middle East reached nearly $168.9 billion in 2024, accounting for around 12.5 percent of the continent’s total trade. Imports from the region alone amounted to approximately $98 billion, largely consisting of refined petroleum products, manufactured goods, and industrial inputs.
The report warned that disruptions to shipping routes and maritime logistics have increased transportation costs, insurance premiums, and import bills across Africa, reducing the competitiveness of exports and putting additional pressure on external balances.
Development banks help narrow financing shortfall
According to the report, development finance institutions (DFIs) have played a critical role in preventing Africa’s trade finance gap from widening further.
Their interventions reduced the financing shortfall from a potential level exceeding $100 billion to around $74 billion annually between 2021 and 2024 through liquidity support, guarantees, risk-sharing facilities, and correspondent banking partnerships.
As of September 2025, the AfDB had supported more than $13.5 billion in trade transactions through various financing instruments, including $2.13 billion in trade finance lines of credit and $850 million in commodity finance facilities.
The bank’s risk participation agreements facilitated approximately 3,100 transactions worth $8.8 billion, with 56 percent benefiting small and medium-sized enterprises (SMEs) and nearly 20 percent supporting intra-African trade.
The report also highlighted the growing role of digital trade finance solutions and alternative financing instruments in improving access to funding for businesses across the continent.
Egypt joins export finance drive as SMEs face funding constraints
Egypt was among the countries highlighted in the report for expanding participation in continent-wide trade finance initiatives.
The AfDB noted that Egypt recently joined Afreximbank’s Fund for Export Development in Africa (FEDA), alongside Nigeria and Malawi, in a move aimed at boosting export financing and helping narrow Africa’s trade finance gap.
The report also underscored the growing importance of PAPSS, which seeks to facilitate cross-border payments in local currencies and reduce dependence on foreign exchange. Through its African Currency Marketplace platform, PAPSS has already facilitated pilot transactions involving 12 African currencies.
The recent launch of PAPSSCARD is expected to further lower transaction costs, improve payment efficiency, and support intra-African trade, creating new opportunities for exporters and businesses across the continent, including Egypt.
Despite these advances, small and medium-sized enterprises (SMEs) remain the most affected by financing constraints.
According to the report, trade finance rejection rates averaged 37 percent, with smaller firms facing the greatest difficulties in accessing funding due to limited collateral, foreign exchange shortages, and compliance requirements.
The AfDB urged governments, commercial banks, and development institutions to expand SME-focused trade finance programmes, accelerate digitalization, strengthen foreign currency liquidity support, and simplify trade procedures to unlock Africa’s trade potential.
The report concluded that closing the continent’s trade finance gap will be critical to boosting exports, strengthening regional value chains, and fully realizing the benefits of the AfCFTA at a time when global trade is becoming increasingly fragmented and uncertain.
Short link: