Africa’s ambition to significantly expand trade within the continent under the African Continental Free Trade Area (AfCFTA) could remain out of reach unless governments, financial institutions and development partners address an estimated annual trade finance gap of between US$80 billion and US$120 billion.
This is according to the 2026 African Trade Report released by Afreximbank, which identifies inadequate trade finance as one of the continent’s most significant structural barriers to regional economic integration and industrialisation.
The report argues that although AfCFTA has created one of the world’s largest single markets, many African businesses continue to struggle to access the financing required to take advantage of expanding cross-border trade opportunities.
According to Afreximbank, the financing deficit is limiting the ability of businesses particularly small and medium-sized enterprises (SMEs) to secure working capital, import production inputs, fulfil export contracts and expand operations into regional markets.
The report attributes the persistent financing gap to elevated sovereign risk perceptions, limited risk-bearing capacity among financial institutions, high transaction costs and weak credit infrastructure across many African economies.
These constraints, it noted, continue to suppress private sector participation in regional trade despite growing policy efforts to deepen economic integration.
The report cautioned that while African governments have made considerable progress in reducing tariff barriers through AfCFTA, financing constraints are increasingly emerging as the more critical obstacle to boosting intra-African trade.
According to Afreximbank, achieving meaningful growth in regional commerce will require policymakers to move beyond tariff liberalisation and prioritise the development of robust financial ecosystems capable of supporting production, exports and cross-border trade.
To bridge the financing gap, the report recommends expanding trade finance facilities, increasing the use of credit guarantees and blended finance instruments, and strengthening the role of development finance institutions in mobilising private capital for trade-related investments.
It also calls for more investment in industrial ecosystems, digital trade infrastructure and efficient payment systems to improve the competitiveness of African businesses and reduce dependence on external markets.
Afreximbank highlighted the Pan-African Payment and Settlement System (PAPSS) as a key instrument for facilitating regional trade by reducing reliance on hard currencies, lowering transaction costs and enabling faster cross-border payments.
The report concludes that Africa’s trade challenge has evolved beyond market access alone.
Instead, it argues that the continent’s ability to realise the full economic benefits of AfCFTA will increasingly depend on whether businesses can access affordable financing to produce, transport and sell goods competitively across African markets.
Without closing the trade finance gap, the report warns, Africa’s efforts to accelerate industrialisation, strengthen regional value chains and boost intra-African trade could continue to fall short of their full potential.