Trade Finance in Africa GTR East Africa Trade &
Author : karlyn-bohler | Published Date : 2025-06-27
Description: Trade Finance in Africa GTR East Africa Trade Commodity Finance Conference 2017 Lamin M Drammeh wwwafdborgtradefinanceprogram AfDB 2016 Survey Coverage 49 countries 246 banks Total bankintermediated Trade Finance USD 400 billion
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Transcript:Trade Finance in Africa GTR East Africa Trade &:
Trade Finance in Africa GTR East Africa Trade & Commodity Finance Conference 2017 Lamin M Drammeh www.afdb.org/trade-finance-program/ AfDB 2016 Survey Coverage – 49 countries 246 banks Total bank-intermediated Trade Finance USD 400 billion (30% of Africa’s trade) Gap – USD 100 billion Relatively low risk asset class NPL of 5% vs 12% for all asset classes Regional differences in TF NPL levels Trade Finance in Africa Top confirming banks Trade Finance in Africa Constraints to Trade Finance Source: WTO 2016 Global Trade Finance Survey: Significant/very significant impediments to TF Banks’ Trade Finance Portfolio Is SMEs a risky segment - NPLs? 13% 16% 31% 11% 11% SMEs 14% New Clients 3% All TF clients 5% Africa TF NPLs Intra-regional Trade Flows 50.2% 25.8% 68.5% 52.3% 17.7% 8.8% 17.8% Positive correlation – intraregional trade and development Source: WTO International Trade Statistics 2015 Intra-Africa trade finance by region 4.5% 24.5% 25% 3.6% 17.4% Africa 20% of banks’ financing Net oil exporting countries -10% Net oil importing countries - 21% Positive correlation - Intra-Africa trade finance and regional integration USD 1 Billion Trade Finance Program - 2013 Risk Participation Agreement (Guarantees) Trade Finance Line of Credit (Liquidity) Soft Commodity Finance Facility (Agriculture) Trade enabling policies, Infrastructure projects, T/As AfDB in Trade Finance Supported more than USD 5 billion of trade in Africa Guaranteed > 1,300 trade transactions – 49% SMEs 25% of trade transactions supported are intra-Africa 6 active confirming banks • More than 300 Issuing Banks Coverage - 48 African countries Conducted 2 continent-wide surveys on TF in Africa AfDB’s TF Journey so far To unlock Africa’s huge potential and accelerate economic development and social progress we need to increase access to finance for SMEs and facilitate more trade: Explore other financing vehicles – Trade funds, insurance companies, Supply Chain Financing, receivables financing Strengthen the capacity of local banks Enhance ecosystem collaboration Blockchain/Fintechs - Ecobank Fintech competition, M-Shwari Trade facilitation programs of MDBs More research and thematic studies Risk Perception management – AML/KYC Advocacy for conducive regulatory environment Explore solutions to hard/soft infrastructure challenges What we can do together
