African businesses have been struggling to keep up with the regional markets. The presence of previous colonialism has kept small and medium enterprises from expanding. This has created a halt in Africa's economic integration, as international trade and associated risks have continued to arise as an issue for trade finance stability. There have been small steps taken to increase intra-African trade by the implementation of the African Continental Free Trade Area (AfCFTA), which has a goal to reduce tariffs and non-tariff barriers. Since 2021, 49 countries have approved and continued to follow the removal of intracontinental trade barriers; thus, intra-African trade reached $192.2 billion by December 2023. Documenting a $5.9 billion increase since 2022, showing a positive increase in trade finance initiatives.
Economists have put together a strategic list of initiatives to help African countries compete in global markets and support the growth of sustainable development. Investments in financial ecosystems could look like more infrastructure in roads, digital networks, and ports. However, based on findings from Afreximbank, the investment would have to amount to $130 - $170 billion annually to meet their fullest economic potential. There needs to be a movement towards partnerships with private-sector actors and development-finance institutions and the African government. If private investments had lower risk rates and access to concessional finance, there could be real change within Africa's economy.
Article: https://www.project-syndicate.org/commentary/trade-finance-key-to-africa-economic-integration-growth-by-gwen-mwaba-2025-08
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