In 2011, Africa used to be one of the most integrated places globally in terms of trade finances. However, Africa's trade finances have been hit with growing problems, including the COVID-19 pandemic. What are the reasons for such a situation? And how are they being rectified? Let's take a look.
According to various studies, Africa's trade finance participation rates have fallen drastically between 2013 to 2019 - by almost 16%. There are several reasons behind the fall of Africa's trade growth. It includes less access to finance, regulatory challenges, inadequate foreign exchange liquidity, competition, falling commodity prices, and more. The pandemic too wreaked havoc as it led to a twin demand-supply shock in the continent. Demand for products from the continent, supply chain blockages, and mass production shutdowns halted supply.
But trade finance has always remained a key driver in Africa's economic and social development. So, banks like Afrexim and AfDB have been trying to revive the market by providing new and innovative solutions.
Read more: https://www.emeriobanque.com/news/africa-trade-finances-and-efforts-for-revival
