Over the last ten years, Africa’s trade growth has been one of the worst among the major global regions, mostly due to falling commodity prices, competition, inadequate foreign exchange liquidity, regulatory challenges and access to trade finance. Although trade finance remains a popular activity among banks, the participation rates have decreased. Despite this persistently large trade finance gap, trade remains a key driver of Africa’s social and economic development. As a result, development finance institutions such as the African Development Bank and the African Export-Import Bank have sought to provide solutions to boost intra-Africa trade.
Lucy Stratton is an Associate in Baker McKenzie Johannesburg office.