Abuja, Nigeria — Africa’s persistent trade finance gap–now estimated at over $420 billion–poses a critical threat to the continent’s industrial ambitions, job creation, and sustainable economic transformation. But the African Export-Import Bank (Afreximbank) is proposing a comprehensive solution to close this gap and build a more sovereign, resilient, and inclusive African financial ecosystem.
The Bank’s 2025 African Trade Reportand African Trade and Economic Outlook Report, unveiled by Dr. Yemi Kale, Afreximbank’s Group Chief Economist, during its 32nd Annual Meetings in Abuja, deliver a comprehensive roadmap to confront what it calls a “systemic and structural constraint on Africa’s future.”
“This is not just about demand exceeding supply,” Dr. Kale said during his remarks. “The $420 billion trade finance gap reflects deep-rooted structural issues–from outdated global regulations like Basel IV to systemic de-risking and long-standing institutional biases that marginalize African markets.”
The Bank’s position is that the trade finance shortfall is no longer merely a matter of liquidity or financial access–it is a structural challenge born out of global financial systems that do not favor African realities. And it is precisely this mismatch that the newly launched reports aim to correct.
According to Afreximbank, many African businesses–especially small and medium-sized enterprises (SMEs) and industrial clusters–struggle to access affordable trade finance. Currency volatility, high borrowing costs, and limited risk assessment tools have further eroded access to capital. This financial exclusion not only affects private enterprise but also slows down regional industrialization and efforts under the African Continental Free Trade Area (AfCFTA).
Global shifts in financial architecture–marked by rising interest rates, US dollar volatility, and the de-risking practices of multinational banks–have disproportionately affected African countries. These macroeconomic dynamics have added further pressure on African economies, making the urgency to develop localized financial solutions even more pressing.
“Tariffs are no longer the main barriers to trade,” Dr. Kale stated. “The real constraints today are financial–how money moves, how risks are priced, and how trade is financed.”
The African Trade Report 2025, themed “African Trade in the Changing Global Financial Architecture”, explores how global financial fragmentation is redefining access to trade and capital. Meanwhile, the 2025 Economic Outlook Report, titled “Africa’s Resilience in the Changing World Order”, provides forward-looking macroeconomic forecasts and identifies strategic responses.
The combined analysis from both reports points to a crucial conclusion: if Africa does not control its trade finance architecture, it risks being continuously sidelined in a fast-changing global order.
Afreximbank’s solution to the widening trade finance gap rests on three critical pillars, each representing a transformative shift in how Africa could finance and structure its own trade.
The first pillar is developing local currency financing solutions. By increasing the use of local currencies in trade and financing, African economies can reduce dependence on volatile foreign exchange markets and lower transaction costs. This approach enhances economic sovereignty while insulating countries from external shocks. Dr. Kale stressed that building trust in Africa’s own currencies is fundamental to this transformation. “We need to stop treating our currencies as second-tier,” he said. “A sovereign financial ecosystem must begin with trust in our own instruments of trade.”
The second pillar calls for innovating alternative financing structures. Afreximbank recommends the development of tailored financial instruments that reflect Africa’s unique market realities. These include blended finance tools, supply chain finance mechanisms, impact investment models, and instruments that specifically serve the needs of informal sector traders, agribusinesses, and regional manufacturing.
“We must design trade finance instruments for Africa–not import frameworks that weren’t built with us in mind,” Dr. Kale emphasized. This innovation is seen as vital to achieving inclusive financing, especially for high-impact sectors across the continent.
The third pillar focuses on leveraging digital platforms to enhance efficiency and access. One such platform championed by the Bank is the Pan-African Payment and Settlement System (PAPSS), which enables faster, cheaper, and safer intra-African payments in local currencies.
Already, dozens of African central banks have joined PAPSS, signaling a shift toward greater financial autonomy. “Our digital platforms are designed not just for speed, but for sovereignty,” Dr. Kale noted. This development is key in reducing transaction bottlenecks and dependence on third-party international payment systems.
Beyond recommendations, Afreximbank is already demonstrating its commitment through action. The Bank reported disbursing $18.7 billion in 2024 alone, aimed at supporting trade, industrial development, and economic resilience across Africa. “We are not just producing reports–we are actively shaping the future,” Dr. Kale stated. “From disbursements to platforms like PAPSS and the AfCFTA Adjustment Fund, we are creating the infrastructure of Africa’s trade future.”
The 2025 reports also outline a broader economic transformation strategy that goes beyond the finance gap. This includes scaling up Africa’s development finance institutions (DFIs) so they become stronger, more responsive engines of capital deployment across national and regional economies. It also involves investing in digital trade infrastructure, logistics systems, and human capital to support innovation and entrepreneurship at scale.
Perhaps most critically, the reports emphasize accelerating AfCFTA implementation to deepen regional integration and build intra-African value chains. A thriving intra-African market is seen as the bedrock for economic independence and long-term prosperity.
“Resilience is not enough,” Dr. Kale warned. “We must go beyond surviving shocks and begin structurally transforming our economies–by industrializing, diversifying, and innovating.”
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Ultimately, Afreximbank sees these efforts not just as economic necessity, but as a matter of strategic sovereignty. The aim is to position Africa as a decision-maker, not a bystander, in the evolving global financial order. “We want an Africa that doesn’t just respond to global economic shifts, but helps shape them,” said Dr. Kale. “These reports are not academic–they are blueprints for a future where Africa leads.”
The reports were launched in the presence of several high-level dignitaries, underscoring their strategic importance.
Attendees included Prof. Benedict Oramah, President and Chairman of Afreximbank; Dr. Terrance Drew, Prime Minister of St. Kitts and Nevis; Mr. Wamkele Mene, Secretary General of the AfCFTA; Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria; Mr. Wale Edun, Nigeria’s Minister of Finance and Economy; Mr. Denys Denya, Senior Executive Vice President of Afreximbank; and Dr. Tope Fasua, representing Nigeria’s Vice President.
As global financial systems continue to shift and fragment, Afreximbank’s 2025 reports argue that the time has come for Africa to build its own architecture–anchored in its currencies, driven by its institutions, and aligned with its development priorities.
“Engineering transformation isn’t theory–it’s practice,” Dr. Kale concluded. “And that’s exactly what we’re doing.”
Read the original article on Liberian Observer.
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