The report finds that Africa’s trade profile remains heavily dependent on exports of raw materials, including agricultural commodities, oil, gas and minerals, while imports continue to be dominated by manufactured goods, machinery and other value-added products.
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The African continent must accelerate efforts to diversify its economies, deepen regional integration and invest in critical infrastructure if it is to unlock its full trade and investment potential, according to a new report released by the African Export-Import Bank (Afreximbank).
In the latest edition of its Trade and Development Finance Brief, Afreximbank examines the structural challenges shaping the continent’s trade performance and investment outlook amid growing global economic uncertainty.
The report finds that Africa’s trade profile remains heavily dependent on exports of raw materials, including agricultural commodities, oil, gas and minerals, while imports continue to be dominated by manufactured goods, machinery and other value-added products.
According to the report, this trade structure leaves many African economies vulnerable to external shocks, including commodity price fluctuations, geopolitical tensions and disruptions to global supply chains.
Afreximbank argues that addressing these vulnerabilities will require a deliberate shift towards industrialisation, value addition and stronger regional trade linkages.
Central to this transformation is the implementation of the African Continental Free Trade Area (AfCFTA), which the report identifies as a key mechanism for diversifying trade, strengthening regional value chains and expanding intra-African commerce.
The report notes that the AfCFTA, together with the African Union’s Agenda 2063 development framework, provides a practical roadmap for integrating fragmented markets across the continent and promoting industrial development.
The findings reinforce the importance of accelerating regional integration, expanding trade finance and investing in productive infrastructure if Africa is to build a more diversified, competitive and investment-ready economy in the years ahead.
As implementation progresses, intra-African exports are projected to increase by more than 20% over the next decade, creating new opportunities for businesses and improving economic resilience.
The report also highlights the urgent need for increased investment in trade-enabling infrastructure. Key priorities include expanding energy generation and transmission networks, improving transport systems, upgrading ports and logistics facilities, and strengthening communications infrastructure.
According to the publication, targeted infrastructure investments can significantly reduce the cost of doing business, improve cross-border trade efficiency and support industrialisation efforts across the continent.
In addition to infrastructure development, the report identifies several other priorities necessary to strengthen Africa’s trade and investment ecosystem. These include improving regulatory coherence, strengthening institutions, promoting economic diversification, expanding access to finance for small and medium-sized enterprises (SMEs) and accelerating the adoption of digital financial technologies.
The report notes that both domestic and foreign investment are increasing across many African economies, although foreign capital continues to dominate investment flows.
It also points out that investment remains unevenly distributed, with Eastern and Southern Africa attracting a larger share of foreign direct investment than Western and Central Africa.
Afreximbank believes these trends underscore the need for coordinated action among governments, development finance institutions and private-sector stakeholders to create a more balanced and resilient investment landscape.
Dr. Yemi Kale, group chief economist and managing director of research at Afreximbank, said regional development finance institutions have an increasingly important role to play in supporting trade and investment across the continent.
“Regional development finance institutions, including the African Export-Import Bank, are playing an increasing role in supporting intra-African trade through trade finance and related initiatives,” said Kale.
She noted that the report highlights several Afreximbank-led initiatives designed to strengthen Africa’s trade ecosystem, including the Intra-African Trade Fair, the Pan-African Payment and Settlement System (PAPSS), the AfCFTA Adjustment Fund, the Border Markets Initiative and the Collaborative Transit Guarantee Scheme.
These initiatives aim to address longstanding barriers to trade by improving access to finance, reducing transaction costs and facilitating cross-border business activities. While acknowledging the progress made in recent years, the report concludes that substantial challenges remain.
“Addressing these gaps will be essential to increasing financing, strengthening competitiveness and unlocking Africa’s full trade and investment potential,” Kale said.
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