Africa trade finance gap tops US$74bn as banks retreat

Africa’s trade finance gap has widened to more than US$74bn, underlining the pressure facing exporters, importers and banks across the continent.

The African Development Bank warned that the shortfall has grown as international banks reduce correspondent relationships and domestic lenders remain constrained by capital, liquidity and risk appetite.

The gap is especially damaging for small and medium-sized businesses, which are more likely to depend on trade finance for working capital, import cover and access to regional markets. When banks pull back, viable trade can be delayed or lost entirely.

The findings come as African economies are already dealing with higher import costs, currency pressure and disruption linked to energy and shipping markets. These conditions increase demand for trade finance at the same time as lenders become more cautious.

For trade finance providers, the size of the gap highlights the need for more risk-sharing structures, guarantees and local bank capacity. Development finance institutions have increased support, but the scale of demand remains well above available supply.

The warning also strengthens the case for digital documentation, better credit data and expanded use of trade credit insurance. These tools can help reduce risk and make more transactions bankable.

Africa’s trade finance gap is not only a funding problem. It is a constraint on intra-African trade, industrialisation and SME growth.