Boosting African trade: Afreximbank's financial system push - CNBC Africa
In a significant development for the African continent, the African Export-Import Bank (Afreximbank) unveiled its landmark 2025 report on African trade, providing a comprehensive view of the economic rebound witnessed in 2024. Notably, trade among African countries surged by 12.4% to a staggering $220.3 billion, marking a sharp recovery from the 5.9% contraction experienced in 2023. Speaking to CNBC Africa, Group Chief Economist of Afreximbank, Dr. Yemi Kekale, illuminated the resilience of African economies despite the multitude of global challenges endured since the onset of the COVID-19 pandemic in 2019. According to Dr. Kekale, African countries, collectively, have not only weathered the storm but have emerged stronger, leveraging internal trade cohesively to bolster economic growth. Dr. Kekale emphasized that a newfound understanding of intra-continental collaboration has played a pivotal role in driving the economic resurgence. By engaging more vigorously in trade and strengthening multilateral financial frameworks, Africa has reduced its reliance on traditional capital sources from the global market. "The report highlights that, ironically, Africa’s less integrated position in the global economy has provided a buffer against global economic shocks," he noted. Diving into the regional economic landscapes, East Africa has leaned heavily on its burgeoning digital economy, noted Dr. Kekale. In contrast, West Africa remains predominantly influenced by commodity exports, such as oil and gas in Nigeria and gold in Ghana. Each region, though distinct in its economic drivers, showcases increased resilience and an upward trajectory in economic performance. External economic tensions and tariffs have further underscored the importance of self-reliance in African trade policies. The emerging global economic reordering presents a unique opportunity for African economies, with nations positioned as attractive partners amid growing geopolitical tensions between the Western and Eastern blocks. Dr. Kekale detailed this as an opportunity not to be squandered. "This particular crisis is indeed favorable for Africa," he stressed, highlighting how certain countries, such as China, have introduced zero tariffs for African goods, making African nations highly desirable trade partners. The report calls upon African policymakers to seize this moment to demand stronger trade agreements, enhance local production, and maximize resource extraction to build a sustainable economic infrastructure. Countries like Ghana and Nigeria, rich in gold and oil respectively, are urged to reinvest revenues into creating solid economic foundations rather than focusing solely on current expenditures, which have historically led to squandered opportunities. The potential reformation of alliances across the Global South could redefine Africa’s trading landscape. Recent activities, like Afreximbank raising funds through a 'panda bond' in China, reflect a strategic departure from traditional trading patterns. Africa's growing payments system, experiencing an astonishing 1,000% year-on-year growth, exemplifies the continent's embrace of innovation, reducing dependency on the US dollar, and aligning with the evolving global financial architecture. Dr. Kekale concluded with a call to action for African countries to focus on aligning monetary, fiscal, and increasingly, trade policies to bolster economic growth. The Afreximbank report ultimately aims to serve as a wake-up call, urging African nations to engage actively in the global economic discourse and assert themselves as key players in the reshaped global economic order. The overarching narrative from Afreximbank's report is clear: Africa stands at the threshold of a transformative period. By capitalizing on current opportunities, African nations can craft a formidable future in the global economy, transitioning from historically passive roles to assertive leaders in international trade.