Africa’s trade outlook brightens amid global challenges, says Afreximbank

Intra-African trade also expanded by 12.4 percent, climbing to $220.3 billion — its highest level in history.

However, intra-African trade still accounts for just 14.4 percent of Africa’s total formal trade, compared to 60 percent in Europe and over 40 percent in Asia, underscoring the need for deeper regional integration.

Themed “African Trade in a Changing Global Financial Architecture”, the report highlights how Africa can navigate rising protectionism, volatile capital flows and growing geopolitical tensions by accelerating the implementation of the African Continental Free Trade Area (AfCFTA).

“The positive trade performance demonstrates the continent’s resilience and improving macroeconomic stability,” the report notes.

“Yet Africa must strengthen internal linkages, diversify exports and build trade-enabling infrastructure to avoid external vulnerabilities,” it added.

Afreximbank President and Board Chairperson, Prof Benedict Oramah, said Africa’s inclusion in the G20 bloc last year offers a rare opportunity to push for reforms in the global financial system, particularly on fairer credit ratings, development financing and reallocation of special drawing rights.

“Global economic fragmentation presents Africa with a strategic opening to consolidate intra-African trade and chart its own course,” Prof Oramah said in the foreword.

Rising global fragmentation and protectionism are weakening multilateralism and disrupting trade, according Afreximbank group chief economist, Mr Yemi Kale.

He said escalating debt pressures and climate volatility are straining Africa’s fiscal space, food systems, and infrastructure resilience.

“The report provides clear guidance for navigating global uncertainty, emphasizing the need for alignment across national, regional and continental strategies to harness Africa’s demographic strengths and resource potential,” he said during the launch of the report.

The report identifies key areas for action, including harmonising AfCFTA tariff schedules, implementing the Pan-African Payment and Settlement System (PAPSS), and investing in digital platforms to streamline cross-border transactions.

Afreximbank sees digitalisation as a game-changer for trade. By 2025, Africa’s digital finance ecosystem is projected to generate over $40 billion annually in revenues, driven by increased adoption of mobile money, e-commerce and fintech services.

But access to trade finance remains a critical barrier. The continent’s trade finance gap is estimated at $100 to $120 billion annually, particularly affecting small and medium-sized enterprises.

In 2024, Afreximbank disbursed over $17.5 billion to support trade and aims to increase intra-African trade financing to $40 billion by 2026.

To support long-term growth, the bank is also calling for reforms in global capital markets and deeper collaboration with African multilateral institutions. The Alliance of African Multilateral Financial Institutions (AAMFI), launched in 2024, is spearheading efforts to develop regional financial mechanisms and reduce dependency on external funding sources.

Despite an improved outlook, the report warns that Africa’s trade prospects remain vulnerable to external shocks, currency volatility, and tightening global credit conditions.

It urges governments and private sector actors to prioritise industrialisation, strengthen value chains, and deepen collaboration.

“With decisive action, Africa can turn today’s disruptions into tomorrow’s opportunities,” the report states.

The Afreximbank report comes at a time when African leaders are stepping up efforts to use trade as a tool for economic transformation, with the AfCFTA increasingly seen as a cornerstone for achieving inclusive and sustainable development across the continent.