Africa faces a significant trade finance deficit hampering economic growth and regional integration, according to the African Export-Import Bank’s latest publication.
The finding appears in Contemporary Issues in African Trade and Trade Finance (CIAT), Volume 10, Number 1, released in October 2025. The publication features eight research papers examining African trade finance and policy innovation, with contributions from academics and policymakers exploring digitalization, regulatory reforms, and sustainable finance.
A paper by Roberta Alport identifies systemic bottlenecks in trade finance that impede participation in global trade by developing and emerging economies. Drawing on World Trade Organization (WTO) and International Finance Corporation (IFC) diagnostic studies, the research offers practical solutions to improve access to finance and strengthen local institutions across Africa.
Recent estimates place the continent’s trade finance gap at about US$100 billion annually. However, the CIAT study provides more detailed figures. Alport’s research indicates unmet demand for trade finance in Africa reaches approximately US$81 billion annually, or roughly 40 percent of Africa’s total trade finance needs. Small and medium enterprises face the harshest rejection rates, with more than half their requests denied compared with fewer than one in 10 for multinational corporations, according to the study.
Alport emphasizes that the shortfalls are not marginal but structural and systemic, with direct implications for Africa’s capacity to expand exports, participate in value chains, and achieve both regional integration and inclusive growth. The paper describes these constraints as fundamental barriers to trade participation in developing and emerging economies.
The research examines trade finance availability in West Africa specifically. Despite relatively higher bank intermediated coverage compared with other developing regions, trade finance availability remains structurally limited. The study estimates that approximately 25 percent of merchandise trade flows in Côte d’Ivoire, Ghana, Nigeria, and Senegal are supported by instruments such as letters of credit and trade loans.
Limited financial infrastructure creates persistent obstacles for local firms. Weak credit systems and high collateral requirements continue restricting access to trade finance, while African banks face liquidity constraints and the erosion of correspondent banking relationships. These factors combine to create an environment where viable businesses struggle to secure financing for legitimate trade transactions.
Alport concludes that easing these constraints could raise trade volumes substantially. The paper underscores the need for context specific reforms and coordinated multi actor responses. This recommendation aligns with broader calls for development finance institutions to play a more active role in bridging the financing gap.
Another study in the CIAT volume by Ogechi Adeola and Olaniyi Evans proposes a pioneering multi theoretical framework integrating artificial intelligence and blockchain technology into African trade finance. The authors suggest this framework would enhance efficiency, inclusivity, and auditability in the financial sector.
The publication also examines digital currencies’ potential in reshaping Africa’s trade ecosystem, with research by Anthony Kyereboah Coleman and Kezia Boateng exploring both opportunities and challenges associated with implementing digital currency systems in African markets. Their work emphasizes the need for robust regulatory frameworks, advanced technologies, and digital infrastructure across the continent.
Additional papers investigate climate action through trade finance mechanisms, Africa Caribbean integration, and commodity based industrialization strategies. The collection offers perspectives on financial and trade innovations needed to propel Africa’s economic transformation.
George Elombi, President and Chairman of the Board of Directors of Afreximbank, observed in the foreword that Africa is confronted with a significant finance deficit that hinders its growth. He noted the edition brings together articles examining the transformative potential of innovative financial and trade mechanisms in driving economic change across African nations.
The publication appears as Africa’s merchandise trade recovered in 2024, surging 13.9 percent to US$1.5 trillion following a 5.4 percent contraction in 2023. However, the continent still represents only 3.3 percent of global exports, underscoring the urgency of addressing financing constraints that limit participation in international commerce.
