Africa must reposition its trade infrastructure to capture greater value from global economic shifts, with industrialisation, stronger intra-African trade and improved access to finance identified as key priorities in the African Export-Import Bank’s (Afreximbank’s) latest African trade report.

The report highlights that rising geopolitical tensions, shifting global alliances and trade fragmentation are reshaping the global economic landscape, presenting both challenges and opportunities for the continent.

Titled ‘Leveraging Geopolitics for Trade and Industrialisation in Global Africa’, the report notes that the global economy has remained resilient, with the global GDP having expanded by 3.4% in 2025, although growth is expected to slow modestly to 3.1% this year.

However, it cautions that the global outlook remains fragile amid intensified geopolitical tension, worsening economic fragmentation, renewed trade disputes, market volatility, rising public debt concerns and declining institutional credibility.

The Afreximbank report also notes that Africa finds itself at a crossroads, with changing global supply chains, evolving trade routes and shifting geopolitical alliances creating a need for a more nuanced strategic approach to trade and industrial development.

It notes that Africa’s merchandise exports continue to face constraints, particularly owing to a persistent trade finance gap linked to low foreign exchange liquidity and limited correspondent banking relationships.

The report has also noted the African Development Bank’s yearly survey, which outlined that Africa’s trade finance gap remained at about $74-billion in 2025, limiting exporters’ ability to secure the financing required to participate effectively in global trade.

With this in mind, Afreximbank says Africa’s ability to benefit from changing global trade dynamics will depend on strengthening industrial ecosystems, expanding intra-African trade and sustaining coordinated financial support.

The report argues that adaptive policy frameworks, strategic trade positioning and stronger foreign direct investment interventions will be central to building a resilient and sustainable industrialisation pathway.

A key priority identified in this regard is the acceleration of the African Continental Free Trade Area, which the report describes as critical for deepening intra-African trade and strengthening regional value chains.

Intra-African trade remains comparatively low relative to other regions and there remains a greater need to reduce tariff and non-tariff barriers, harmonise standards, improve customs procedures and integrate fragmented markets to improve production linkages across the continent.

“In this environment, development finance institutions (DFIs) play a critical role in risk management and the provision of tailored financing instruments that sustain trade and industrialisation. In periods characterised by high interest rates, exchange rate volatility and tightening global liquidity, DFIs act as countercyclical financiers by providing liquidity when private capital retreats.

“Historically, Africa’s export structure has been dominated by primary commodities with limited value addition, leaving economies vulnerable to commodity price volatility while limiting industrial development and employment creation,” the report argues.

Afreximbank maintains that the current global environment reinforces the need for a transition away from exporting raw commodities towards value-added production and processing.

The report says accelerated industrialisation will require greater investments towards local processing industries across sectors including agriculture, minerals and energy, alongside the development of technologies, skills, industrial clusters and special economic zones linked to regional value chains.

Instead of exporting raw materials such as cocoa, crude oil or unprocessed minerals, it says African economies should focus on developing downstream industries such as agricultural processing, petrochemicals and metal fabrication.

By expanding value addition, African economies can capture greater economic value, improve export competitiveness and reduce vulnerability to external shocks.

Meanwhile, the report notes that Africa’s monetary policy environment has broadly reflected global trends, with central banks in Africa implementing aggressive monetary tightening measures between 2024 and 2025 to stabilise exchange rates and contain inflation.

Despite some easing in policy rates, financial conditions remained restrictive throughout 2025, limiting private sector credit, investment and trade financing. The report points to a structural disconnect between policy rates and lending rates in many African economies, highlighting weaknesses in monetary policy transmission mechanisms and the need for deeper financial sector reforms.

“Although global credit markets experienced slight easing through modest adjustments to lending conditions, the overall financing environment in Africa remained restrictive relative to global benchmarks.

“These dynamics highlight the need for coordinated macroeconomic management and deeper financial sector reforms to enhance credit access and support sustainable growth,” the report says.

This will be particularly important for Africa’s small and medium-sized businesses, which face elevated borrowing costs and limited access to affordable credit, constraining their participation in cross-border trade and regional value chains.