Africa’s Trade Finance Gap May Hit $86.6bn, AfDB Warns

Africa’s worsening trade finance crisis may deepen over the next two years as rising geopolitical tensions in the Middle East, surging energy prices and tightening global credit conditions threaten to widen the continent’s financing gap to $86.6 billion by 2027, the African Development Bank (AfDB) has warned.

The warning was contained in the bank’s newly released 2025 Trade Finance Report, which highlighted fresh risks facing African economies amid disruptions to critical global shipping routes, including the Strait of Hormuz.

“The conflict has driven a sharp rise in oil and fertilizer prices and elevated insurance and freight costs, which have in turn inflated shipping costs for Africa’s predominantly net oil-importing economies,” the bank stated. The report noted that at least 29 African currencies have depreciated since the outbreak of the conflict, further mounting pressure on foreign exchange reserves and making import financing more difficult for businesses and governments.
AfDB projected that under a moderate-risk scenario, Africa’s trade finance gap could rise to $86.59 billion by 2027, representing a 17.66 per cent increase from the $73.59 billion recorded in 2024. The bank further warned that weakening currencies and rising import bills may force international correspondent banks to tighten lending conditions, thereby limiting access to trade finance across African markets.
The development is expected to hit critical sectors such as manufacturing, agriculture, energy and industrial production, all of which rely heavily on imported raw materials and equipment. The report also projected worsening inflationary pressures across the continent as sustained energy price shocks continue to drive up production and import costs.
According to the AfDB, inflation across Africa could average 10.4 per cent in 2026, nearly one percentage point higher than the bank’s January 2026 forecast. In a more severe scenario involving prolonged disruption of the Strait of Hormuz alongside tighter global credit conditions, the continent’s trade finance gap could widen further to $95.59 billion by 2027.
However, the bank maintained that under a baseline scenario without major geopolitical disruptions, Africa’s trade finance gap could gradually narrow to about $65 billion. The AfDB also disclosed that global financial institutions are increasingly redirecting capital towards conflict-related hedging activities, thereby reducing appetite for trade finance exposure in emerging and frontier markets, including Africa.
The bank revealed that the continent’s trade finance gap widened by 53 per cent during the post-pandemic period of 2022 and 2023 compared to 2020 levels. According to the report, Africa’s trade finance gap stood at approximately $93.4 billion in 2019 before recovery efforts began after the pandemic.
The AfDB attributed the persistent financing constraints to declining bank approval rates, tighter global financial conditions and rising borrowing costs, warning that the situation could further undermine Africa’s trade competitiveness and economic growth prospects if left unchecked.