Bank Recapitalisation Can Close Africa’s $120bn Trade Finance Gap

Afreximbank says Nigeria’s bank recapitalisation could help African businesses access more trade finance, as the continent faces an $80bn–$120bn funding gap each year.

Speaking at an Ecobank Customer Forum in Lagos, Afreximbank’s Group Chief Economist and Managing Director for Research and Trade Intelligence, Dr. Yemi Kale, argued that stronger Nigerian bank balance sheets would make it easier to fund exporters, manufacturers, and SMEs at scale, especially as intra-African trade expands under the African Continental Free Trade Area.

Why recapitalisation is being linked to trade

Trade expansion needs credit, and credit at scale requires banks with deeper capital buffers. In his view, banks cannot sustainably finance business growth, machinery imports, export production, or SME expansion without adequate capital. 

If Nigerian banks are expected to support more cross-border trade, they must first be strong enough to take on bigger, longer-term risk.

He also stressed Nigeria’s importance to Africa’s trade trajectory. As a major economic hub and consumer market, Nigeria’s ability to mobilise financing can influence whether more African trade is driven by value-added goods rather than raw materials.

The AfCFTA angle: SMEs, exporters, and regional value chains

Beyond big corporate deals, Kale said recapitalisation should translate into more structured financing for exporters and SMEs, especially businesses that can plug into regional supply chains. 

The point is that when trade finance improves, businesses can scale output, meet standards, and deliver consistently across borders. Without that kind of financing support, regional trade agreements remain big on paper but weak in daily business reality.

Linking bank reform to Nigeria’s $1 trillion ambition

Kale tied the recapitalisation drive to Nigeria’s broader ambition of building a $1 trillion economy, arguing that growth targets only become real when a country can produce competitive goods and services for local markets and exports. He said competitiveness is not only about financing. He pointed to infrastructure gaps, regulatory bottlenecks, and high logistics costs as problems that raise production costs and weaken export performance.

According to him, reducing these pressures can lower costs, ease inflation, improve purchasing power, and create a cycle where stronger demand drives higher production, more jobs, and stronger incomes.

A key issue raised was Africa’s long-standing pattern of exporting raw materials and importing finished products. Kale linked this to weak competitiveness and limited industrial capacity. His argument is that stronger banks can help finance industrial upgrading, but the wider environment must also support production at scale and at a cost that can compete regionally.

Ecobank and CBN perspectives

Ecobank Nigeria’s Managing Director, Bolaji Lawal, said the forum focused on practical ways to accelerate exports and deepen regional integration, positioning it as part of Nigeria’s economic transformation agenda. He also highlighted Ecobank’s footprint across 33 African countries as a useful platform for facilitating cross-border trade.

A Central Bank of Nigeria official, Tiku Allu of the Trade and Exchange Department, stressed the need for stronger regional coordination and financial integration. He also emphasised “backward integration,” arguing that African banks should help fund production within the continent rather than reinforcing dependence on imports from outside Africa.