New report highlights COVID-19 impact on African trade finance

Abstract

African Export-Import Bank (Afreximbank), in collaboration with the United Nations Economic Commission for Africa (ECA), the African Development Bank (AfDB) and Making Finance Work for Africa Partnership (MFW4A) released on 15 April 2021 the African Trade Finance Survey Report which provides a better understanding of the trade finance landscape across Africa and how it has evolved during the COVID-19 pandemic. The report is the first of its kind, surveying 185 banks from across Africa, representing more than 58% of total assets held by African banks. The report pointed out that African trade amounts to $1,077 billion but that banks intermediate $417 billion of this, approximately 40%, whilst the global average is 80%. Ms Bola Adesola, Senior Vice Chairman for Africa at Standard Chartered stressed the need to increase businesses on the continent, to help drive trade both extra- and intra-African trade and banks’ intermediation. The African Continental Free Trade Agreement (AfCFTA), she added, can provide a platform to help drive greater businesses. The report made numerous recommendations. These include: a greater engagement between central banks and industry; push for increased digitalization and take up of technologies; and better data, which will help better understand and price risk.