The trade finance gap holding back African trade

A gap that falls on small firms

Afreximbank’s African Trade Report 2025 estimated the continent’s annual trade finance gap at about US$100 billion. Small and medium-sized businesses make up 80% to 90% of businesses in Africa, and the gap severely limits their ability to trade across borders. The report points to high borrowing costs and global banking rules such as Basel IV among the causes.¹

It also found that only 18% of African banks’ trade finance portfolios support trade between African countries, which it reads as a bias towards external markets.¹

A market that is opening, and a private sector asked to lead

At a forum in Gaborone in January 2026, the SADC Executive Secretary, Elias Magosi, urged Botswana’s private sector to lead implementation of the African Continental Free Trade Area (AfCFTA). He called it a resilience strategy, noting that shocks such as sudden US tariff changes had rippled through value chains.²

Business Botswana’s president, Neo Nwako, listed what firms need to take part: a supportive policy environment, efficient customs and trade facilitation, competitive costs, access to trade finance, institutional coordination and genuine public-private dialogue. The AfCFTA creates a single market of more than 1.3 billion people.²

Botswana’s trade runs through its neighbour

South Africa supplies about 60% of Botswana’s imports, including fuel, machinery, food and industrial goods. In 2025 South African exports to Botswana were worth R73.6 billion, while imports from Botswana were about R7.6 billion.³

At the sixth session of the Botswana–South Africa Bi-National Commission in May 2026, the two governments reviewed a memorandum of understanding on trade and industrial cooperation, designed to cut trade barriers, improve customs cooperation and support SACU value chains. Energy, finance, transport and technology were among the priority sectors.³

Sources

1. Afreximbank: Africa’s $100 billion trade finance gap puts AfCFTA and SMEs at risk Nairametrics, 26 June 2025. Reports Afreximbank’s African Trade Report 2025.
2. SADC urges private sector to spearhead regional economic integration The Star (Xinhua), 31 January 2026
3. SA, Botswana eye stronger regional trade ties at BNC SAnews, 19 May 2026. Trade figures are from South Africa’s Department of Trade, Industry and Competition.

This article reflects NextCap’s reading of public information as at 28 October 2026. It is for general information only and is not financial, legal or tax advice. Figures are taken from the sources listed and may have been revised since. See our disclosures.