The Economy 
Africa’s ambition to unlock $4 trillion in intra-continental trade under the African Continental Free Trade Area (AfCFTA) is facing a major roadblock: a staggering $100 billion trade finance gap that threatens to sideline small and medium enterprises—the very backbone of African economies.
This warning comes from a new report, “African Trade Report 2025: African Trade in a Changing Global Financial Architecture,” launched by the African Export-Import Bank (Afreximbank) at its Annual Meetings.
According to the report, the continent’s financing gap is not just a number—it’s a structural barrier that severely limits SMEs, which represent up to 90% of businesses in Africa, from participating meaningfully in regional trade. Without affordable and accessible trade finance, these enterprises are locked out of the AfCFTA’s promised opportunities.
“Just 18 percent of African banks’ trade finance portfolios support intra-African trade,” the report reveals, pointing to a persistent bias toward external markets. This undermines AfCFTA’s mission to build resilient, Africa-centered supply chains.
The trade finance shortage has been worsened by rising global interest rates and regulatory constraints like Basel IV, which make it difficult for banks to lend to smaller, risk-prone businesses. As a result, SMEs are unable to scale, integrate into regional value chains, or contribute to the continent’s industrial transformation.
While Afreximbank has committed $17.5 billion in trade finance and spearheaded platforms like the Pan-African Payment and Settlement System (PAPSS), the bank acknowledges that more systemic reforms are urgently needed. Harmonized financial regulations and cheaper credit access are crucial if AfCFTA is to truly deliver on its promise of a unified, thriving African market.
Beyond finance, the report also highlights how external shocks are further squeezing Africa’s trade prospects. The continent’s share of global exports has dropped from 3.5% in 2009 to 3.2% in 2023, driven by global protectionism and the fallout from the US-China rivalry over semiconductors and critical minerals.
“Africa’s participation in high-value sectors like electronics is being choked by supply chain disruptions and trade barriers such as the EU’s Carbon Border Adjustment Mechanism and US tariffs,” the report notes.
Even Africa’s vast reserves of critical minerals—like cobalt and lithium—are at risk of being exploited through extractive partnerships that offer little local value addition. The solution, Afreximbank argues, lies in building African-led value chains, boosting infrastructure, and advancing digital finance—all under the strategic framework of AfCFTA.
Speaking at the report launch, Afreximbank President Prof. Benedict Oramah emphasized that the success of AfCFTA hinges on bold financial reforms and stronger intra-African cooperation. Nigerian Vice President Kashim Shettima, represented by Mr. Tope Fasua, echoed the urgency of deepening regional trade integration in a shifting global order.
Approved in 2012 by African leaders and now a flagship initiative under the African Union’s Agenda 2063, AfCFTA is Africa’s most ambitious economic project in decades—aiming to connect 1.4 billion people under a single market.
But without closing the trade finance gap, the dream of a borderless African economy could remain just that—a dream.
