Translating 1.3 billion population to economic force through intra-African trade

Development Finance Institutions (DFIs) and Deposit Money Banks (DMBs), through conferences and trade fairs, are squaring up to advance the economic potentials in Africa with a view to deepening intra-African trade as enunciated by the African Union (AU) and encapsulated in the African Continental Free Trade Area Agreement(AFCTA), writes Group Business Editor, SIMEON EBULU

There is growing awareness within the African sub-region, and especially among banks and DFIs to begin to focus and harness  the potentials that the African continent possess in intra-African trade and commerce. Regional collaboration and trade across Africa’s porous borders transcends centuries, and although largely informal, it remains a focal point and a veritable means of livelihood that has sustained border communities and by extension, grown the economies of partnering nations over the years. This is even more so because of the largely agrarian nature of most  African countries,  save the exception of a few that have mines and precious mineral resources that gave rise to mining companies.

Be that as it may, there is a groundswell of renewed consciousness and hope, buoyed by technology and introspection, and lately, the interplay of geopolitical events and protectionism being orchestrated by the developed world, that Africa actually is more well positioned, than hitherto assumed, to hold its own and become an economic power bloc like every other existing regional entity.

Looking beyond Africa had been the singsong of yesteryears, but the new rhythm is a call to Africa to start to look inwards. And the urgency to reset the narrative is daily gaining traction, and nations and corporates are taking positions.

AfCTFA, pioneered by AU, actually set the tone in March 2018 but as with most government backed initiatives, the push and drive by the continental body, did not meet the speed, nor the momentum and urgency required to actualise the AfCFTA dream, as it were. Nonetheless, a lot of progress has been recorded.

However, what is exciting and encouraging about the push for inter-African trade and commerce is the interest and demonstrable commitment by DFIs, amongst them the African Export Bank Afreximbank, the African Development Bank (AfDB) and other Deposit Money Banks (DMBs), some of which are among Nigerian leading financial entities. These include Access Bank, United Bank for Africa (UBA) and  Zenith Bank, just to mention but a few.

The commitment and drive to see Africa become a vibrant trade bloc, like the North American Free Trade Agreement (NAFTA) and  the European Union(EU), among several others, have fallen on  the shoulders of these institutions, alongside others, and they have started drawing up programmes and holding conferences to explore and harness the abounding opportunities that exist within the African continental space.

In the space of two years for example, Access Bank, in partnership with other like-minded institutions, has pushed through two conferences in South Africa aimed at deepening intra-African trade. At the meeting, the Managing Director/Chief Executive, Access Bank,  Roosevelt Ogbonna, called for stronger collaboration among policymakers, financiers and businesses to accelerate trade within Africa and unlock the continent’s economic potential, stressing that Africa must address structural barriers that continue to limit the growth of intra-continental commerce despite its vast market opportunities.

He said the conference was convened to continue conversations on how Africa can expand trade within the continent while strengthening its participation in global markets.

Ogbonna expressed concern that Africa’s share of global trade remains relatively small, pointing out that fragmented trade corridors and structural bottlenecks are part of the reasons that growth of commerce across the continent is being continuously hindered.

 “The reality,” he argued, “is that Africa still controls a small share of global trade. The corridors are still fragmented and more aspirational than functional, and too many small businesses that aspire to trade across Africa remain constrained.”

He urged stakeholders across the continent to move beyond dialogue and take concrete steps that will strengthen trade relationships among African countries, stressing that Africa’s economic transformation would depend largely on the willingness of businesses and institutions to collaborate more effectively.

Ogbonna however sees a ray of hope and a brighter future in intra-African trade, saying, since the last edition of the conference, in 2025, some progresses have  been recorded across key sectors of the economy. “We have seen value chains emerging across agriculture, manufacturing and services, and we are seeing African brands crossing borders and building a global presence,” he said. He also pointed to the growing role of technology platforms in reducing friction in areas such as payments, logistics and market access.

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Speaking on the need for stronger infrastructure financing in growing intra African trade, the Director-General for Southern Africa at AfDB, Kennedy Mbekeani, called for stronger mobilisation of private capital to finance critical infrastructure required to unlock the full potential of Africa’s trade integration. As he put it: “The mobilisation of private capital remains crucial as many African governments are constrained by limited fiscal space and overstretched balance sheets. The mobilisation of capital, particularly private capital, is something that we need to work on.”

Zambia’s Minister of Commerce, Trade and Industry, Chipoka Mulenga,who also spoke  during the ministerial panel discussion of the conference, called for policy alignment among African countries, saying it would be critical in unlocking the continent’s trade potential.

He said: “Policy is very important in making anything come together. It must be consistent, resilient and coherent. If intra-African trade must be enhanced, we must deliberately craft policies that speak the same language across our countries. We should leverage our comparative advantages, rather than competing with one another.”

His Ghanaian counterpart, Elizabeth Ajare, said Africa does not lack policy frameworks but rather struggles with harmonised implementation.

“Africa does not lack policies; we already have many. Our challenge is the implementation of these policies in a harmonised manner. That is what we must focus on to make trade work effectively across the continent.”

Ajare, who is the Ghanaian Minister for Trade, Agriculture and Industry, stressed the need for African countries to be willing to make sacrifices and demonstrate the willingness to compromise and adopt mutual recognition frameworks to facilitate trade across borders.

“If we insist on verifying every product independently we will not make progress,” she warned.“Harmonising standards and recognising each other’s certification processes will allow us to trade more efficiently.”

Botswana’s Minister of Trade and Entrepreneurship, Tiroeaone Ntsima, on his part, said African governments must focus on creating enabling environments that allow businesses and investors to drive economic growth. “The governments of today are not like those of the 1960s where everything was done by government. Our role now is to create an enabling environment for businesses and investors to thrive,” he posited, adding that Botswana is repositioning itself as a key trade corridor within the region. “In the past we described ourselves as a landlocked country, but today we see ourselves as land-linked. By creating corridors that connect markets across the continent, we open up new opportunities for trade and economic growth,” he stated.

Challenges

Three critical challenges were identified which  the Executive Director, African Subsidiaries at Access Bank Plc. , Seyi Kumapayi, said must be overcome if trade in Africa is to make any significant progress. He listed them as a lack of access to appropriately-priced capital; a lack of access to information; and a lack of trust between trading partners on the continent.

Kumapayi bemoaned the fact that despite Africa’s 1.3billion population, trade between the continent and the rest of the world amounted to only three per cent, with intra-African trade accounting for only about 16 per cent of the continent’s total trade, adding that Access Bank is committed to change that to ensure that “Africa starts to trade with itself.

“We want to use our connections in and outside Africa and, working within the African Continental Free Trade Area Agreement, to be a gateway between Africa and the world. We are working to bridge these glaring gaps to ensure that we take intra-African trade to between 30 per cent to 40 per cent over the next couple of years.”

He said there are numerous businesses in Africa that do not have access to the information, or business intelligence needed to make informed decisions about opportunities outside their national borders, adding that the financial services sector and other stakeholders must make it a priority to share information and harness technology to ensure African businesses are able to analyse opportunities in other countries.

He said there’s also a trust deficit  between trading partners, and cited the numerous historic challenges between a number of countries in Africa, including a lack of reciprocity relating to regulations and a lack of uniformity in standards on the continent.

He said:“When there is a lack of trust, people don’t trade with each other. These issues seriously hamper collaboration and there is a need to focus on building trust and creating a healthy climate for trade. He stressed that  Access Bank has always been committed to driving economic growth and fostering sustainable development across the African continent. “Our presence now spans 24 countries, where we play crucial role in facilitating trade, supporting both corporates and SMEs, and empowering key demographics such as women and youth. “This extensive footprint enables us and other banks to foster cross-border trade, offer tailored financial solutions, and stimulate job creation, thus contributing to the broader socio-economic development of the regions in which we operate,” he said.

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Empowering Africa

The conference held in  South Africa, with the theme: ‘Empowering Africa through Trade, Innovation and Sustainable Growth,’ brought together a range of stakeholders in the trade ecosystem to encourage discussion on trade solutions and strategies to expand markets in Africa.

Delegates included small and medium enterprises (SMEs) and regional corporates, industry leaders, policymakers, importers and exporters, customs and government revenue agencies and trade financiers.

Speakers at the conference included Secretary-General AfCFTA, Wamkele Mene; Executive Vice President, Intra-African Trade and Export Development , Afreximbank,Kanayo Awani; Counsellor, World Trade Organisation(WTO), Dr Marc Auboin; and Vice President, Private Sector Infrastructure and Industrialisation,AfDB, Solomon Quaynor.

Kumapayi described the event as an opportunity to make connections, share insights, and to collaborate to solve Africa’s challenges and to seek opportunities to support intra-African trade.

“We need to bring everybody to the table, to say Africa’s time is now. We need to take action, and today’s conference is part of that action. It’s not a conference where we just talk, but one where we agree on what must be done and ensure we follow up to ensure it’s done,” he stated.

Expansion strategy

Turning to Access Bank’s expansion strategy across the continent and its plans for the near future, Kumapayi said: “In line with our long-term vision, Access Bank continues to focus on expanding its capabilities across the continent. Between 2025 and 2027, our strategy will be centred on consolidating our market leadership by deepening relationships with our clients, enhancing our digital banking platforms, and expanding our services in key sectors such as agriculture, technology, and energy. We are also committed to continuing our support for women and youth empowerment, which remains a cornerstone of our corporate social responsibility initiatives.

“In the near future, Access Bank will be intensifying efforts to streamline operations, optimise our resources, and ensure that our customers across Africa benefit from a seamless banking experience, while we also continue to expand our reach into emerging markets. As we grow, we are focused on creating positive, lasting impacts in the communities where we operate, driving financial inclusion, and contributing to Africa’s ongoing economic transformation.”

Kumapayi said the conference is a demonstration of the bank’s commitment to unlocking the massive potential for trade in Africa. “I am very excited about trade prospects for Africa. We can’t keep saying Africa has potential. We have to realise that potential. Because of Access Bank’s convening power, we have about 60m customers across Africa who can lead that change,”he said.