AfDB Trade Finance Report highlights resilience of African Banks after COVID-19

BRAZZAVILLE, Congo — The African Development Bank’s (AfDB) 2025 Trade Finance Report has highlighted the resilience of African financial institutions in the years following the COVID-19 pandemic, despite mounting global economic and geopolitical challenges.

The fifth edition of the report was unveiled on Wednesday during the Bank Group’s 2026 Annual Meetings in Brazzaville, Republic of Congo.

According to the report, intra-African trade accounted for 34 percent of total bank-intermediated trade between 2020 and 2024, representing an 89 percent increase compared to pre-pandemic levels recorded between 2011 and 2019.

The report provides an updated assessment of Africa’s trade finance landscape in the post-pandemic era, while introducing new dimensions such as digitalisation and environmental sustainability. It also quantifies, for the first time, the contribution of Development Finance Institutions (DFIs) to trade finance across the continent.

Presenting the report, Anthony Simpasa, Director of the Macroeconomic Policy, Forecasting and Research Department at the African Development Bank, said unmet demand for trade finance declined by nearly 10 percent between 2019 and 2024 due to strong interventions from multilateral development banks, governments, export credit agencies, and global financial institutions.

He noted that these interventions helped sustain trade flows during a difficult global period, adding that without DFI support, Africa’s annual trade finance gap could have exceeded $100 billion between 2020 and 2024.

However, Simpasa warned that renewed geopolitical tensions and disruptions to global supply chains could reverse recent gains.

“Renewed geopolitical tensions and disruptions to global supply chains and trade flows could reverse post-pandemic progress in narrowing the trade finance gap. For instance, tighter correspondent risk appetite could widen the trade finance gap to between $86.6 billion and $102.6 billion by 2027 under moderate to severe scenarios,” he said.

The report estimated Africa’s unmet demand for trade finance at between $74 billion and $92 billion in 2024, representing about 5.4 percent of the continent’s total merchandise trade value.

It also revealed that commercial banks intermediated only 23 percent of Africa’s total trade over the five-year study period, compared to 40 percent during the 2011–2019 period, underscoring the persistent financing challenges facing African businesses.

Foreign exchange liquidity shortages emerged as the leading barrier to trade finance growth, with 36 percent of banks surveyed identifying limited FX liquidity as their primary challenge between 2020 and 2024, up from 18 percent during the 2015–2019 period.

The report further showed that adoption of digital trade finance solutions remains low across the continent, largely due to high implementation costs and inadequate technological infrastructure. Only 28 percent of surveyed banks reported adopting digital tools for trade finance operations.

A panel discussion following the launch featured Didier Acouetey, Senior Advisor to AfDB President Sidi Ould Tah for the Private Sector; Francisca Tatchouop Belobe, Commissioner for Economic Development, Trade, Tourism, Industry and Minerals at the African Union Commission; Admassu Tadesse, Group President and Managing Director of Trade and Development Bank; and Mehdi Tanani, Regional Director for Central Africa at Proparco.

The panellists highlighted both opportunities and challenges in expanding sustainable trade finance across Africa.

Tadesse said innovations such as digitisation, guarantees, and asset management initiatives were gradually expanding the trade finance market across the continent.

“This should be advanced further by new systemic initiatives such as the New African Financial Architecture for Development (NAFAD), alongside derisking and smart partnerships capable of unlocking more global capital for Africa,” he said.

Acouetey described NAFAD as a major step toward closing Africa’s trade finance gap.

“NAFAD gives us, for the first time, a coherent continental framework to close the trade finance gap — not project by project, but systemically. That is the shift that changes everything for African SMEs,” he said.

Belobe urged commercial banks to prioritise small and medium-sized enterprises (SMEs), describing them as critical drivers of Africa’s economic growth.

“SMEs are too large for microfinance, too small for corporate banking, but far too commercially important to be left outside the trade finance system,” she said.

Tanani stressed the need for a more resilient and digitally driven trade finance ecosystem capable of protecting SMEs from global shocks while accelerating Africa’s economic integration.

The report also noted that the African Development Bank and other DFIs facilitated approximately $32 billion in trade finance annually between 2020 and 2024, accounting for roughly 3 percent of Africa’s merchandise trade during the period.

AfDB’s Trade Finance Program was established in 2013, with its inaugural survey conducted in 2014. Since then, the Bank has produced four periodic trade finance surveys, including country-specific reports on Kenya and Tanzania.