Africa loses $120bn annually due to trade finance gap – report

Africa is forfeiting an estimated US$120 billion each year due to a persistent trade finance shortfall that continues to restrict intra-continental commerce, according to the 2026 African Trade Report released by Afreximbank.

The report warns that despite progress in implementing the African Continental Free Trade Area (AfCFTA), inadequate access to credit remains a major obstacle to boosting regional trade and achieving long-term industrialisation goals.

Small and medium-sized enterprises (SMEs), which form the backbone of Africa’s private sector, are among the hardest hit. Many of these businesses are unable to secure the financing needed to import goods, fulfil cross-border orders, or expand operations beyond domestic markets.

According to the report, several structural weaknesses underpin the financing gap. These include heightened perceptions of sovereign risk that deter investment, limited risk appetite among financial institutions, high transaction costs, and underdeveloped credit infrastructure in many countries.

These challenges collectively constrain private sector participation in regional trade, even as governments intensify efforts to deepen economic integration across the continent.

To bridge the gap, Afreximbank recommends expanding trade finance support mechanisms, including the use of credit guarantees and blended finance tools. It also calls for stronger involvement of development finance institutions in mobilising private capital for trade-related activities.

In addition, the report stresses the need for sustained investment in industrial ecosystems, digital trade infrastructure, and more efficient cross-border payment systems.

It argues that addressing these constraints would enhance the competitiveness of African businesses, unlock the full potential of intra-African trade under the AfCFTA, and reduce the continent’s dependence on external markets.