Africa faces a persistent $120 billion-plus trade finance gap that limits its ability to move beyond raw material exports and into value-added production and industrialization.
At the recent Africa Business Forum 2025 hosted by the United Nations Economic Commission for Africa (UNECA), stakeholders emphasized the urgent need to strengthen regional value chains through a multisectoral approach, as increasing global economic pressures – including rising interest rates and de-risking steps by international financial institutions – affect African businesses.
Yeabsira Zewdie, Director and Head of Development Finance Services at MiDA Advisors, stated, “We need stronger partnerships, innovative financing solutions, and a renewed commitment to turn Africa’s raw potential into refined power.”
Institutional investors play a key role in bridging Africa’s trade finance gap by providing longer-term capital to businesses driving additional value and regional trade.
Development financial institutions can help de-risk trade finance in Africa through blended finance solutions, risk-sharing mechanisms, and targeted investment funds, which is essential for strengthening partnerships between African financial institutions and international investors.
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Strengthening these partnerships is key to ensuring that the continent can move from raw material exports to competitive, value-added goods that drive sustainable economic growth.
Africa’s leading development financial institutions have been at the forefront of developing trade-focused investment platforms to address this challenge.
The African Development Bank (AfDB) supports trade finance through its Trade Finance Program (TFP), providing guarantees and liquidity to African financial institutions, while the Africa Finance Corporation (AFC) is mobilizing capital to finance trade-enabling infrastructure, such as ports, logistics, and energy.
The Trade and Development Bank (TDB) has expanded trade finance support for small and medium enterprises (SMEs) and emerging corporates, particularly in high-growth industries like manufacturing and agribusiness.
Afreximbank has played a key role in unlocking capital for African businesses through a suite of trade finance solutions, including structured trade finance, risk-sharing instruments, and targeted investment vehicles.
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Closing Africa’s trade finance gap is not just an economic necessity but a strategic imperative for scaling industrialization, strengthening regional value chains, and expanding export markets.
With most of Africa’s exports still dominated by raw materials, the continent must accelerate access to innovative financing mechanisms that enable businesses to add value, compete globally, and create sustainable jobs.
Institutions like Afreximbank, AfDB, AFC, and TDB are addressing trade finance gaps.
Greater collaboration with global investors is required to meet Africa’s growing capital needs, and strengthening risk-sharing mechanisms, increasing blended finance solutions, and leveraging digital trade platforms will be critical in de-risking investments.
Africa can transition from being a supplier of raw materials to a leading producer of high-value goods.
