Webinar: Trade Finance in Africa: Trends Over the Past Decade and Opportunities Ahead
Making Finance Work for Africa, the African Development Bank (AfDB) and the the African Export-Import Bank (Afreximbank) are hosting a joint webinar entitled: " Trade Finance in Africa: Trends Over the Past Decade and Opportunities Ahead ".
Date: 24 September 2020 @ 1pm GMT | 2pm Casablanca | 2pm London | 4pm Nairobi
The African Development Bank, in collaboration with the African Export-Import Bank (Afreximbank), is releasing the third series of “trade finance in Africa” report on September 24, 2020. The report, titled “Trade Finance in Africa: Trends Over the Past Decade and Opportunities Ahead” provides the most comprehensive research on the trade finance landscape in Africa and builds on the two previous reports released in 2014 and 2017. It is based on a survey of over 600 unique commercial banks in 49 countries across Africa for the period 2011-19.
The report aims to set a benchmark for the trade finance landscape in Africa prior to the Covid-19 crisis, and aid policy response to the trade finance industry during and after the pandemic. To do so, the authors provide a comprehensive overview of the size of bank-intermediated trade finance in Africa and show how the trade finance gap has evolved over the past decade. They also identify some of the structural challenges that hinder banks’ ability to effectively intermediate Africa’s trade with the world and the important role played by development finance institutions (DFIs) in supporting the trade finance industry in Africa.
To preview a few of the findings, the report shows that only 40% of Africa’s trade by value is bank intermediated – a far lower share than the global average of 80%. The trade finance gap (unmet demand) while falling, also remains unacceptably high. Indeed, the region’s share of the global trade finance gap is far higher than what its share of world trade would predict. The report identifies unintended regulatory bottlenecks as part of the key constraints driving these pattens.
The good news is that DFIs are playing a more active role in supporting the trade finance industry in Africa. More than half of banks that engaged in trade finance activities between 2015-19 received some form of support from DFIs to expand their trade finance activities. Yet, the report also shows that DFI support is skewed towards certain sub-regions and financial intermediaries – particularly foreign-owned private banks.
The report outlines some policy recommendations to help boost trade finance supply in Africa, including but not limited to raising awareness about the impact of stringent regulatory requirements on trade finance intermediaries and addressing geographical and institutional disparities in DFI support to the sector. With the on-going pandemic, the need for financing to reenergize the region’s trade is urgent. It is hoped that the findings from this report will bring policy makers and industry experts together to work to make trade finance more accessible to African traders.
Mr. Stefan Nalletamby, Director PIFD, African Development Bank (AfDB)
Mr. Eugene Bempong Nyantakyi, ECMR, African Development Bank (AfDB)
- Ms. Lola Amoussou, ECMR, African Development Bank (AfDB)
- Mr. Souleymane DIAGNE, Group Head of Trade Finance, Ecobank Transnational Incorporated
- Mr. Bleming NEKATI, Chief Trade Finance Officer, African Development Bank
- Mrs. Gwen Mwaba, Director - Global Head of Trade Finance, Afreximbank
- Dr. Hippolyte Fofack, Chief Economist, Afreximbank