Africa is losing an estimated US$120 billion annually due to a widening trade finance gap that continues to constrain intra-African trade and economic growth, according to the 2026 African Trade Report by Afreximbank.
The report said the financing shortfall is significantly slowing the implementation of the African Continental Free Trade Area (AfCFTA), despite progress in removing trade barriers across the continent.
It noted that while African countries have made important policy advances to boost regional trade, limited access to trade finance remains a major obstacle to industrialisation and economic integration.
According to the report, small and medium-sized enterprises (SMEs), which form the backbone of Africa’s private sector, are the hardest hit by the funding gap.
Many businesses are unable to access the credit needed to import goods, fulfil regional orders or expand operations across borders, limiting their ability to take advantage of opportunities created by the AfCFTA.
The report attributed the financing deficit to several structural challenges, including high sovereign risk perceptions, limited risk-bearing capacity among financial institutions, high transaction costs and weak credit infrastructure in many African economies.
It said these constraints continue to suppress private sector participation in regional trade despite efforts to deepen economic integration.
To address the challenge, the report recommended expanding trade finance facilities, increasing the use of credit guarantees and blended finance instruments, and strengthening the role of development finance institutions in mobilising private sector investment.
It also called for greater investment in industrial ecosystems, digital trade infrastructure and efficient payment systems to improve cross-border commerce.
According to the report, addressing these barriers would enhance the competitiveness of African businesses, unlock the full potential of intra-African trade and reduce the continent’s dependence on external markets.
