Brazzaville: The African Development Bank (AfDB) Group has issued a stark warning regarding the potential resurgence of Africa’s trade finance gap, which could once again exceed $100 billion. This cautionary note comes amid rising geopolitical tensions and ongoing disruptions to global trade and supply chains, as outlined in the AfDB’s fifth Trade Finance Report. The report was presented during the 2026 Annual Meetings of the AfDB held in Brazzaville, Republic of Congo.
According to News Agency of Nigeria, the report reveals that from 2020 to 2024, Africa’s unmet demand for trade finance ranged between $74 billion and $92 billion, accounting for approximately 5.4% of the continent’s total merchandise trade value. Despite global economic shocks and geopolitical tensions, African financial institutions have continued to support trade activities. However, the report warns that weaker currencies and stricter correspondent banking conditions could cause the trade finance gap to widen to between $86.6 billion and $102.6 billion by 2027.
The report highlights a decline in commercial bank intermediation of Africa’s trade, with banks facilitating only 23% of the continent’s total trade between 2020 and 2024, down from 40% recorded between 2011 and 2019. This indicates that African trade remains significantly underserved by commercial lenders. Nonetheless, the AfDB notes progress in bank-intermediated intra-African trade, which accounted for 34% of total bank-supported trade from 2020 to 2024, compared to 18% before the COVID-19 pandemic.
Foreign exchange liquidity shortages are identified as the primary challenge to trade finance growth, with 36% of surveyed banks citing limited access to foreign currency as a major constraint. Additionally, the report points out the low adoption of digital trade finance solutions across the continent, with only 28% of surveyed banks implementing digital platforms for trade finance operations. High implementation costs and weak technological infrastructure are cited as barriers to digital adoption.
Despite these challenges, development finance institutions, including the AfDB, have played a crucial role in narrowing Africa’s trade finance gap, facilitating approximately $32 billion in trade finance annually between 2020 and 2024.