In Brazzaville, the 61st Annual Meetings of the African Development Bank are continuing with a number of strategic forums focusing on the continent’s economic future. Among these is the launch of the report on trade finance in Africa, a document that highlights both the challenges and opportunities facing African trade in a global context marked by geopolitical tensions and the aftermath of the Covid-19 pandemic.
Trade remains the driving force behind the continent’s development and industrialisation. But without adequate financing, it is difficult for African businesses, particularly SMEs, to produce, export or locally process their raw materials. According to the report presented by AfDB experts, nearly 278 billion dollars of African trade passes through commercial banks each year. Yet the financing gap remains significant, especially for small and medium-sized enterprises which still struggle to access credit facilities and bank guarantees. In response to this situation, the AfDB and its partners are banking on a new African financial architecture capable of providing greater support to local banks, reducing risks and facilitating trade transactions across the continent.
“We estimate that there are roughly 4 trillion dollars available on the continent through development banks, sovereign wealth funds, commercial banks, deposit institutions and insurance companies. Obviously, not all of it can be mobilised, but there are at least potentially 1 trillion dollars in available savings that can be leveraged. And precisely, the purpose of this new architecture is to mobilise part of these resources so they can be deployed into African economies.”
DIDIER ACOUETEY, Special Adviser to the President of the AfDB – Togo
Also attending the forum was the African Union Commissioner for Economic Development, who stressed the need to harmonise regulations and strengthen continental trade finance mechanisms. The pan-African organisation is notably working towards the establishment of African financial institutions aimed at supporting the continent’s financial sovereignty.
“We also face major difficulties regarding transfer regulations and exchange regulations. At the banking level, we must work extensively on exchange regulations which, in some of our regions, have become an obstacle to trade because they are extremely restrictive. The conditions attached to transfers significantly reduce transactions, even encouraging the creation of black markets in financial transactions.”
FRANCISCA TATCHOUOP BELOBE, AU Commissioner for Economic Development, Tourism, Trade, Industry and Mining – Equatorial Guinea
Another key lever highlighted was digitalisation. According to experts, digital tools can reduce administrative costs and simplify SMEs’ access to banking services and financing. Through this report, the AfDB primarily aims to demonstrate that Africa’s development will depend on a stronger private sector, more industrialised economies and intra-African trade capable of transforming the continent’s vast resources into local wealth.
