Published: 26 June 2025

Intra-African trade experienced a significant rebound in 2024, rising by 12.4 percent to reach US$220.3 billion, according to the African Trade Report 2025. This increase marks a strong recovery following a 5.9 percent decline in 2023 and reflects a growing trend of African nations trading more extensively with each other. The report credits this positive development largely to the ongoing implementation of the African Continental Free Trade Area (AfCFTA), which is rapidly emerging as a cornerstone for the continent's trade resilience and economic integration.

Despite the encouraging growth in intra-African trade, the continent continues to face a substantial trade finance gap estimated at US$100 billion. African banks currently have the capacity to support only about US$18 billion of this need, underscoring a critical shortfall. Yemi Kale, Afreximbank's group chief economist and managing director of research, emphasized the urgent need to strengthen African multilateral financial institutions in order to address this gap. Kale highlighted that building the capacity of these institutions is the most viable path forward to close the financing divide.

Last year, Afreximbank disbursed US$17.5 billion to support intra-African trade, a figure it aims to double by 2026. The report also praised the progress made in digital payment infrastructure, particularly the growing adoption of the Pan-African Payment and Settlement System (PAPSS). This platform enables real-time settlement of cross-border payments in local currencies and has been adopted by 15 African countries, with over a dozen central banks now linked to the system.

By facilitating direct local currency exchanges between African countries, PAPSS reduces the continent's dependence on the US dollar and euro, lowers transaction costs, and speeds up payment processes. It is estimated that full implementation of PAPSS could save Africa as much as US$5 billion annually in transaction fees. Kale described the platform as transformative, improving financial inclusion and supporting the broader goals of the AfCFTA to boost intra-continental trade.

The African Trade Report urged urgent action to convert global economic fragmentation into an engine for resilient and inclusive growth, as well as value-added trade. This involves strengthening African development finance institutions with more capital and fairer global regulation, accelerating the implementation of AfCFTA provisions such as tariff schedules and rules of origin, and enhancing national coordination. The report also emphasized the importance of expanding digital payment infrastructure to alleviate currency and logistical bottlenecks. Furthermore, it called on African representatives at the G20 to push for reforms related to the reallocation of special drawing rights, debt restructuring, and overall global financial governance.

As Africa continues to deepen its regional integration efforts and tackle financial and infrastructural challenges, the continent is positioned to enhance trade resilience and sustain economic growth within the framework of the AfCFTA.
- newsday

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