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To improve the continent’s competitiveness, the bank calls for faster implementation of the African Continental Free Trade Area
Cairo, Egypt | THE INDEPENDENT | Africa has outperformed the global economy despite mounting geopolitical tensions, giving the continent an opportunity to accelerate industrialisation and deepen regional trade if governments move decisively to address structural bottlenecks, according to the latest African Trade Report published by African Export-Import Bank (Afreximbank).
The 2026 edition of the lender’s flagship report, Leveraging Geopolitics for Trade and Industrialisation in Global Africa, argues that the fragmentation of global supply chains—driven by geopolitical rivalries, trade disputes and shifting investment flows—could create new opportunities for African economies to strengthen manufacturing, expand value-added exports and build more resilient regional supply chains.
The report comes as the global economy enters a period of slower expansion. World economic growth eased to 3.4 per cent in 2025 and is forecast to moderate further to 3.1 per cent in 2026. By contrast, Africa’s real GDP growth accelerated to 4.5 per cent in 2025 from 3.4 per cent a year earlier, underlining the continent’s relative resilience despite an increasingly fragmented global trading environment.
Trade performance also strengthened. Africa’s merchandise trade rose 6.1 per cent to approximately $1.5tn, while aggregate inflation fell sharply to 13.1 per cent in 2025 from 21.6 per cent the previous year, reflecting tighter macroeconomic management, policy reforms and support from development finance institutions.
The report argues that these gains demonstrate improving economic fundamentals but warns that sustaining the momentum will require deeper structural reforms and greater regional integration.
“Africa stands at a critical juncture. Geopolitical tensions and economic fragmentation are reshaping global trade patterns, but they also present a historic opportunity for the continent. By strategically leveraging these shifts, Africa can build a more resilient, competitive and inclusive economic future,” said Dr Yemi Kale, Afreximbank’s Group Chief Economist and Managing Director of Research and Trade Intelligence.
“It is imperative for the continent to act decisively to strengthen regional value chains, deepen industrial capacity, expand access to trade finance, and accelerate continental integration. Through coordinated policy action, strategic infrastructure investment, and stronger development finance institutions, Africa can build a more resilient, inclusive, and value-added trade ecosystem. Africa cannot afford to delay.”
Financing challenge
Despite the stronger macroeconomic performance, the report identifies financing as one of the biggest constraints to trade expansion. Africa’s trade finance gap widened to an estimated $74bn in 2025, limiting the ability of businesses to participate fully in regional and global commerce.
The challenge has been compounded by constrained foreign exchange liquidity and the continued withdrawal of correspondent banking relationships, developments that have increased transaction costs and restricted access to international financial services across many African markets.
Global logistics remain another source of vulnerability. The report notes that changes in international shipping routes and persistent disruptions to supply chains have lengthened delivery times while increasing freight costs, disproportionately affecting African economies that remain dependent on imported intermediate goods and external export markets.
Although multinational companies continue to diversify manufacturing bases and shorten supply chains in response to geopolitical risks, the report argues that Africa has yet to capture the full benefits of this realignment because of infrastructure deficits, limited industrial capacity and financing constraints.
To improve the continent’s competitiveness, Afreximbank calls for faster implementation of the African Continental Free Trade Area (AfCFTA), greater investment in regional transport and logistics infrastructure, and broader adoption of digital payment systems through the Pan-African Payment and Settlement System (PAPSS).
The report also highlights the growing role of African financial institutions in supporting economic resilience. Afreximbank, a founding member of the Alliance of African Multilateral Financial Institutions, disbursed $17.5bn in 2024 and is working to double intra-African trade finance by 2026.
PAPSS records progress
Meanwhile, PAPSS is helping reduce transaction costs for businesses by enabling cross-border payments in local currencies, lowering dependence on hard currencies for intra-African trade.
The report concludes that Africa’s ability to convert geopolitical disruption into long-term economic gains will depend on whether governments can accelerate industrialisation, deepen regional markets and mobilise sufficient investment to support manufacturing and value addition.
It argues that coordinated policy reforms, expanded trade finance, stronger transport networks and modern payment infrastructure will be essential if the continent is to build a more diversified and resilient economic model at a time when global trade patterns are being fundamentally reshaped.
