Afreximbank lists $82b trade finance gap as obstacle to AfCFTA potential

African Export–Import Bank (Afreximbank) has listed the high trade finance gap, estimated at $82 billion, by a recent trade finance survey jointly conducted by the bank and the AfDB, as a major obstacle capable of limiting the full trade potential of the African Continental Free Trade Area (AfCFTA).

Addressing participants at a two-day virtual seminar and workshop to mark the official reopening of the bank’s Trade Finance Seminar (ATFS) and workshop held at the weekend, Afreximbank’s Executive Vice President in charge of Business Development and Corporate Banking, Amr Kamel stressed the need for the continent’s leaders and its people to work collectively and reverse trends that have seen Africa stuck on a three per cent share in global trade, 15 per cent in intra-African trade, and one of the world’s least diversified export base.

In addition, he noted that the export sector inherited from Africa’s former colonial powers effectively forced the demise of African industry and created a reliance on imported manufactured goods.

However, he expressed optimism that the establishment of the AfCFTA will propel a strategic shift from small and fragmented markets across Africa towards regional markets that offer greater opportunities for economies of scale and for the deployment of regional integration to drive trade and development.

According to him, the establishment of the AfCFTA will propel a strategic shift from small and fragmented markets across Africa towards regional markets that offered greater opportunities for economies of scale and for the deployment of regional integration to drive trade and development.

“The continent’s leaders and its people recognised that working collectively is the best way to reverse trends that have seen Africa stuck on a three per cent share in global trade, 15 per cent in intra-African trade, and one of the world’s least diversified export baskets. The implementation of the African Continental Free Trade Area (AfCFTA) would spur Africa’s industrialisation and long-term supply chain resilience,” he said.

Kamel stated that Afreximbank has taken a series of steps to support African trade and the implementation of the AfCFTA, including helping to fill both financing and knowledge gaps in Africa’s trade finance market.