Feature/OPED
Geopolitical Changes, African Union Reforms and Election of Next AU Commission’s Chairperson
By Professor Maurice Okoli
The African Union, a continental organisation, is heading for a new traditional face within the framework of its guiding principles. That new forthcoming era would open a new chapter and, to a large degree, determine the future of Africa, especially taking cognizance of the current global changes. In less than a year since the expiration of the African Union Chairperson’s position, an advanced search for the next candidate has begun. As stipulated by the organization’s constitution, the candidate for the powerful position is normally elected. It is tentatively planned to choose the fifth Chairperson to succeed incumbent Chairperson Moussa Faki, whose second term of office ends in February 2025.
The majority of African leaders have spoken of unprecedented reforms, carrying out a significant internal shake-up, and new blood to be pumped into the current African Union leadership and its related allied institutions. Arguments for several changes are necessary to make the continental organisation work more effectively and produce tangible results, especially now within the context of global reconfiguration. Africa is too diverse to fit together. But there are many more interests in uniting the continent. But the political, economic, and cultural diversities have to be transformed into continental strength to ensure development and growth, instead of a noticeable display of weaknesses and passive actions. It is often repeatedly claimed that the African Union needs urgent realistic reforms and some kind of rebranding of its structure as an effective instrument for rapid development, new economic architecture, and substantial growth.
In late January, Rwandan President Paul Kagamé was appointed to lead the AU institutional reform process. It was an important step towards implementing its institutional reforms, setting the Pan-African organisation’s objectives under the leadership of the Heads of State, who meet once a year at the Assembly. As Africa faces a multitude of crises, unstoppable debates have also dominated inside Africa and on international platforms over the performance of the 55-member organisation, its existing challenges, and the way forward in the fast-changing world.
A media report released on March 3, 2024, titled “Museveni Endorses Raila Odinga’s AU Chairperson Bid” and circulated in the East African region showed the publicity campaign and erratic steps taken to promote Kenyan Raila Odinga to take over as Chairman of the AU Commission. Interestingly, Raila Odinga, Kenya’s opposition leader, has readily accepted Ugandan President Yoweri Museveni’s endorsement of his candidature for African Union Commission chairperson.
In a flagship statement posted via his social media platforms, Odinga said Museveni endorsed him during a joint meeting with President William Ruto. The Azimio alliance’s leader stated that the joint meeting with President Museveni and President Ruto was organized at the Ugandan president’s invitation.
“I accepted an invitation from President Yoweri Kaguta Museveni of Uganda for a joint meeting with President William Samoei Ruto. President Museveni strongly endorsed my candidature for Chairperson of the African Union Commission,” said Odinga, showing appreciation for William Ruto for fully supporting his candidature.
The trio also discussed the AU platform for deepening regional integration within the East African Community. Apart from Presidents Ruto and Museveni, other state heads who threw their invaluable weight behind the former Prime Minister are Samia Suluhu (Tanzania), Cyril Ramaphosa (South Africa), Salva Kiir (South Sudan), and Felix Tshisekedi of the Democratic Republic of the Congo. In addition, former Nigerian President Olusegun Obasanjo also endorsed Odinga, saying he is the best candidate to replace the outgoing chair, Moussa Faki.
Raila Odinga has an unmistakable political influence. He was born into a modest political family and grew up in politics. His profound perspectives suggest he operates as a pivotal figure within power dynamics, and his decision-making capacity is perceived as absolutely pragmatic. Odinga, most observers say, possesses an assertive leadership style and always expresses a steadfast interest in the complexity of a development-oriented society. These leadership skills echo his deep-seated affection for a genuine communal, regional, and continental tradition. Odinga as a suitable candidate underscores the perfect choice to embrace and settle for the best administrator for Africa.
Nevertheless, an insight into the choice and nomination of possible candidates is fraught with intrigue and nepotism. But at a glance, Odinga envisions carving out a new, distinctive image for the African Union. His high-value knowledge and experiences, corporate business entrepreneurialism, and pragmatic new economic development thinking would probably save Africa. Narratives too indicated that Odinga would adopt a far-reaching overhauled approach and take unshakable measures towards the most significant issues across Africa. These are essential conditions for re-imaging the AU’s future.
As the history of the stipulated procedures indicates, the elected chairperson becomes the head of the African Union Commission. For instance, on January 30, 2017, after seven rounds of voting, Chad’s Moussa Faki Mahamat was elected chairperson over Nigeria’s Amina Mohamed. He was re-elected in 2021 for another four-year term, which ends in 2025. Moussa Faki Mahamat, born on June 21, 1960, was first elected as the African Union Commission (AUC) Chairperson on January 30, 2017, and assumed office in March 2017. He served previously as State Minister of Foreign Affairs for the Republic of Chad.
According to official documents researched, the Chairperson of the AUC is the Chief Executive Officer, the legal representative of the AU, and the Commission’s Chief Accounting Officer. The Chairperson of the Commission is elected by the Assembly for a four-year term, renewable once.
In broad terms, the Chairperson’s functions include overall responsibility for the Commission’s administration and finances; promoting and popularising the AU’s objectives and enhancing its performance; consulting and coordinating with key stakeholders like member states, development partners, and Regional Economic Communities (RECs); appointing and managing the Commission’s staff; and acting as a depository for all AU and OAU treaties and legal instruments.
The African Union (AU) under Moussa Faki Mahamat has made several achievements, including raising the continental external relations profile and its ascension into the Group of Twenty (G20). In September 2023, when Prime Minister Narendra Modi of India chaired the G20 summit, the G20 nations agreed to grant the African Union permanent membership status in an appreciable move aimed at offering the continent a stronger voice on important questions and to uplift its status on a higher stage. In its final declaration in New Delhi, the G20 granted the African Union full membership. The G20 consists of 19 countries and the European Union, making up about 85 percent of the global GDP and two-thirds of the world’s population.
New Delhi is also counting on earning high-profile PR points to burnish its reputation as a Global South leader. In an article published in Indian and foreign newspapers ahead of the summit, Modi wrote, “Our presidency has not only seen the largest-ever participation from African countries but has also pushed for the inclusion of the African Union as a permanent member of the G20.”
Under Moussa Mahamat’s African Continental Free Trade Area (AfCFTA), the single continental market has the potential to unite an estimated 1.4 billion people in a $2.5 trillion economic bloc. The AfCFTA opens up tremendous opportunities for both local African and foreign investors from around the world.
January 1, 2021, signaled the commencement of Africa’s journey to market integration after it was postponed by six months in 2020 following the outbreak of the coronavirus pandemic. But its huge potential, which cannot be underestimated, is to generate a range of benefits through supporting trade creation, structural transformation, productive employment, and poverty reduction.
It aims at making Africa the largest common market in the world and accelerating continental integration. It is expected to reinforce the measures taken in terms of the free movement of persons, goods, and services across borders. But much depends on the collective determination and solidarity demonstrated by African leaders to face the challenges in a united and resolute manner. It depends on the strong mobilization of African leaders and the effective coordination provided by the African Union.
For this to be successful, Africa has to engage in modernising agriculture and strengthening agro-food systems by working towards its food security rather than simply accepting food packages as ‘gifts’ from so-called external friends. The next stage is to industrialise, add value to the agricultural products by processing them, and finally distribute them locally and for exports, hence the establishment of the AfCFTA. From this concrete perspective will emerge a new Africa, “the Africa we want,” which has understandably become the resounding guiding slogan.
Despite that, there have also been several critical assessments and careful analyses of developments over the past few years. The AU has made scathing remarks on the negative impacts inflicted by imperialism, neocolonialism, and Western hegemony. And further consistently called for calling for a complete overhaul of the multinational financial system to enable the pursuit of needed development goals across Africa. Paradoxically, Africa has huge resources, both natural and human, but the larger size of its population still lives in abject poverty and desperation.
At least a majority of African leaders on their side recognised the need to reform the continental organisation too. It has allegedly been manipulated by external powers, and to a large extent, internal deficiencies and weaknesses are still persistent on the continent. These include the absence of the fundamentals of democracy, good governance, transparency, and accountability, primarily due to weak institutions and ineffective organs of the state, especially the parliaments. Opposition groups are stifled, putting democracy at risk across Africa.
Rising ethnic conflicts, political-economic instability, and military appearance in politics. These have sparked widespread mass protests. Burkina Faso, Chad, Guinea, Gabon, Mali, and Niger are run by military officers. Then there was instability in Libya, Somalia, Sudan, and the Democratic Republic of the Congo (DRC). The biggest vulnerabilities include the proliferation of weapons, weak border control, and unprotected industrial facilities. The inevitable impact on the achievement of Sustainable Development Goals.
Researchers say the African Union should dedicate this year to solving the various issues of instability and restoring credibility in the democratic process. Non-constitutional changes of government have multiplied in total defiance of the entire political and legal system on which the organization was founded. Never since the creation of the African Union has there been such a large number of transitions following unconstitutional changes of government in Africa. (See African Leaders Extraordinary Summit report, February 2024.)
Set up more than two decades ago, the 55-member bloc has long been criticized for being ineffectual and for taking little decisive action in the face of numerous power grabs. Some 19 presidential or general elections are scheduled on the continent in 2024, portending more challenges for the AU.
Seemingly, there is a necessity to navigate a new dynamic development paradigm within the context of multipolar relations. The multifaceted nature of obstacles has to be addressed with a spirit of vigour and valuable perspectives. There are three main directions: democracy and good governance, food security and industrialization, and economy and trade. These could lead to social inclusion and broadening employment for the youth and the next generation. They could also lead to economic growth, stability, and better life conditions across Africa. All aspects of Africa’s development are incorporated into the joint report published at the African Economic Conference 2022.
In a nutshell, the African Union and African leaders have to realign their foreign policies and back away from geopolitical insinuations, rather than take advantage of the complexities and confrontations to look for substantive opportunities to support their efforts in pursuit of building better. The beauty of Africa lies not only in its economic potential but also in its vibrant and diverse cultures.
However, it would be remiss to discuss Africa’s economic growth without addressing the challenges that persist. Poverty, inequality, and a lack of infrastructure continue to hinder progress. It is our collective responsibility to work towards addressing these issues, ensuring that the benefits of Africa’s economic growth are inclusive and sustainable.
Notwithstanding the questions raised above, Moussa Faki Mahamat has spoken of “worrying trends” during these past few years at high-level conferences and meetings, characterising the main challenges “as political instability, climate change, poverty, deficits in economic governance, and marginalisation of women and young people in development and leadership.” Another major subject of discussion has been how the AU will transition to relying on African states to fund most of its budget rather than foreign donors. For instance, the UN Security Council in December adopted a resolution to finance AU-led peace missions but capped it at 75 percent of the budget.
The 37th AU Ordinary Session of the Assembly of Heads of State and Government, at the annual convention in February 2024, stressed the necessity for practical long-term strategies and to strengthen efforts at achieving peace and stability on the continent and to attain the 2030 Agenda for Sustainable Development and AU Agenda 2063. The AU Agenda 2063 is a comprehensive development framework for Africa.
The significant aspect of the retreat was the valuable discussions on the reform agenda. The reform agenda emphasises the need to focus on key priorities with a continental scope, realigning AU institutions to deliver on its objectives, operational efficiency, and sustainable self-financing of the Union. The retreat also reviewed the second ten-year plan of Agenda 2063, which spans from 2024 to 2033.
In the context of a multipolar geopolitical order, African leaders and the African Union should strengthen their positions regarding external partnerships. The African Union has to take up the task of developing collective approaches to the problems of maintaining peace and security, strengthening democratic processes, developing human potential, and ensuring socio-economic growth. If not, the continent risks being left behind and used as a pawn in an increasingly divided global order.
The African Union has, in a parallel direction, spearheaded Africa’s development and integration in close collaboration with African Union Member States, the Regional Economic Communities, and African citizens. The AU’s vision is to accelerate progress towards an integrated, prosperous, and inclusive Africa, at peace with itself, playing a dynamic role in the continental and global arenas, effectively driven by an accountable, efficient, and responsive Commission. These are incorporated into a single continental development program referred to as the AU Agenda 2063.
Professor Maurice Okoli is a fellow at the Institute for African Studies and the Institute of World Economy and International Relations, Russian Academy of Sciences. He is also a fellow at the North-Eastern Federal University of Russia. He is an expert at the Roscongress Foundation and the Valdai Discussion Club.
As an academic researcher and economist with a keen interest in current geopolitical changes and the emerging world order, Maurice Okoli frequently contributes articles for publication in reputable media portals on different aspects of the interconnection between developing and developed countries, particularly in Asia, Africa, and Europe. With comments and suggestions, he can be reached via email: markolconsult (at) gmail (dot) com.
By Blaise Udunze
Nigeria’s refining crisis is one of the country’s most enduring economic contradictions. Africa’s largest crude oil producer, strategically located on the Atlantic coast and home to over 200 million people, has for decades depended on imported refined petroleum products. This illogicality has drained foreign exchange, weakened the naira, distorted investment incentives, and hollowed out state institutions. Instead of catalysing industrialisation, Nigeria’s oil wealth became a mechanism for capital flight, rent-seeking, and institutional decay.
With the challenges surrounding the refining of crude oil, the establishment of Dangote Refinery signifies an important historic moment. The refinery promises to reduce fuel imports to a bare minimum, sustain foreign exchange growth, ensure there is constant fuel domestically, and strategically position Nigeria as a regional exporter of refined oil products if functioned at full capacity. Dangote Refinery symbolises what private capital, technology, and ambition can achieve in Africa following years of fuel queues, subsidy scandals, and global embarrassment.
Nigerians must have a rethink in the cause of celebration. Nigeria’s refining problem is not simply about capacity; it is about systems. Without addressing the policy failures and institutional weaknesses that made Dangote an exception rather than the rule, the country risks replacing one failure with another, this time cloaked in private-sector success.
For a fact, Nigeria desperately needs the emergence of Dangote refinery, and its success is in the national interest. Hence, this is not an argument against the Dangote Refinery. But history warns that structural failures are not solved by scale alone. Over the year, situations have shown that without competition and strong institutions, concentrated market power, whether public or private, can undermine price stability, energy security, and consumer welfare.
The Long Silence of Refinery Investments
Perhaps the most troubling question in Nigeria’s oil history is why none of the global oil majors like Shell, ExxonMobil, Chevron, Total, or Agip has built a major refinery in Nigeria for over four decades. These companies operated profitably in Nigeria, extracted their crude, and sold refined products back to the country, yet never committed capital to domestic refining.
Over the period, it has been shown that policy incoherence has been the cause, not a matter of technical incapacity, such as price controls, resistant licensing processes, subsidy arrears, frequent regulatory changes, and political interference, which made refining an unattractive investment. Importation, by contrast, offered quick returns, lower political risk, and guaranteed margins, often backed by government subsidies.
Nigeria carelessly designed a system that rather rewarded importers and punished refiners. Dangote did not succeed because the system improved; he succeeded despite it. His refinery exists largely because of the concessions from the government, exceptional financial capacity, political access, and a willingness to absorb risks that institutions should ordinarily mitigate. This raises a deeper concern; when institutions fail, progress becomes dependent on extraordinary individuals rather than predictable systems.
The Tragedy of NNPC Refineries
If private investors stayed away, Nigeria’s state-owned refineries should have filled the gap. Instead, the Port Harcourt, Warri, and Kaduna refineries became monuments to mismanagement. Records have shown that between 2010 and 2025, Nigeria reportedly wasted between $18 billion and $25 billion, over N11 trillion, just for Turn Around Maintenance and rehabilitation. Kaduna Refinery alone is estimated to have consumed over N2.2 trillion in a decade.
Despite these expenditures, output remained negligible. This was not merely a technical failure but a governance one. Contracts were poorly monitored, accountability was absent, and consequences were nonexistent. In functional systems, such outcomes trigger investigations, sanctions, and reforms. In Nigeria, the cycle simply repeated itself, eroding public trust and deepening dependence on imports.
Where Is BUA?
Dangote is not the only Nigerian conglomerate to announce refinery ambitions. In 2020, BUA Group unveiled plans for a 200,000-barrels-per-day refinery. Years later, progress remains unclear, timelines have shifted, and execution appears stalled.
This pattern is revealing. When multiple large investors struggle to translate plans into reality, the issue is not ambition but environment. Refinery projects in Nigeria appear viable only at a massive scale and with extraordinary political leverage. Smaller or mid-sized players are effectively crowded out, not by market forces, but by systemic dysfunction.
Policy Failure and the Singapore Comparison
Nigeria often aspires to emulate Singapore’s refining and petrochemical success. The comparison is instructive. Singapore has no crude oil, yet built one of the world’s most sophisticated refining hubs through consistent policy, investor protection, infrastructure planning, and regulatory certainty.
Nigeria chose a different path: price controls, subsidies, weak contract enforcement, and politically motivated policy reversals. Refineries became tools of patronage rather than productivity. Capital exited, infrastructure decayed, and import dependence deepened. The outcome was predictable.
The Cost of Import Dependence
For years, Nigeria spent billions of dollars annually importing petrol, diesel, and aviation fuel. This placed constant pressure on foreign reserves and the naira. Petrol subsidies alone were estimated at N4-N6 trillion per year, often exceeding national spending on health, education, or infrastructure.
Even after subsidy removal, legacy costs remain: distorted consumption patterns, weakened public finances, and entrenched interests built around importation. These interests did not disappear quietly.
Who Really Benefited from the Subsidy?
Although framed as pro-poor, fuel subsidies disproportionately benefited importers, traders, shipping firms, depot owners, financiers, and politically connected intermediaries. Smuggling across borders meant Nigerians subsidised fuel consumption in neighbouring countries.
Ordinary citizens received marginal relief at the pump but paid far more through inflation, deteriorating infrastructure, and underfunded public services. The subsidy system functioned less as social protection and more as elite redistribution.
The Traders’ Dilemma
Why did major fuel marketers like Oando invest in refineries abroad but not in Nigeria? Again, incentives explain behaviour. Importation offered faster returns, lower capital requirements, and political insulation. Domestic refining demanded long-term investment under unstable rules.
In an irrational system, rational actors optimise accordingly. Importation thrived not because it was efficient, but because policy made it so.
FDI and the Confidence Problem
Sustainable Foreign Direct Investment follows domestic confidence. When local investors, who best understand political and regulatory risks, avoid long-term industrial projects, foreign investors take note. Capital flows to environments with predictable pricing, rule of law, and policy consistency.
Nigeria’s challenge is not attracting speculative capital, but building conditions for patient, productive investment.
Dangote and the Monopoly Question
Dangote Refinery deserves credit. But scale brings power, and power demands oversight. If importers exit and no competing refineries emerge, Dangote could dominate refining, pricing, and supply. Nigeria’s experience with cement, where domestic production rose but prices soared due to limited competition, offers a cautionary tale.
Markets function best with competition. Without it, price manipulation, supply risks, and weakened energy security become real dangers, especially in countries with fragile regulatory institutions.
The Way Forward: Competition, Not Replacement
Nigeria does not need to weaken Dangote; it needs to multiply Dangotes. The goal should be a competitive refining ecosystem, not a replacement of a public monopoly with a private monopoly.
This requires transparent crude allocation, open access to pipelines and storage, fair pricing mechanisms, and strong antitrust enforcement. State refineries must either be professionally concessional or decisively restructured. Stalled projects like BUA’s should be unblocked, and modular refineries should be supported.
The Litmus Test
Nigeria’s refining crisis was decades in the making and cannot be solved by one refinery, however large. Dangote Refinery is a turning point, but only if embedded within systemic reform. Otherwise, Nigeria risks trading one form of dependency for another.
The true test is not whether Nigeria can refine fuel, but whether it can build fair, open, and resilient institutions that serve the public interest. In refining, as in democracy, excessive concentration of power is dangerous. Competition remains the strongest safeguard.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
By Linda Saunders
Intro: In many small businesses, the owner often starts out as the bookkeeper, the customer-service desk, the IT technician and the person who steps in when a delivery goes wrong. With so many balls up in the air – and such little room for error – one dropped ball can derail the entire day and trigger a chain of problems that’s hard to recover from. Unlike larger companies that have the luxury of spreading the load across dedicated teams and systems, SMEs carry it all on a few shoulders.
South Africa’s SME sector carries significant weight, contributing around 19% of GDP and a third of formal employment, according to the latest available Trade & Industrial Policy Strategies (TIPS) 2024 review. That is causing persistent constraints, including tight margins, erratic demand, high administrative load, and limited internal capacity.
This is not unique to South Africa. Many smaller businesses across the continent still rely on manual processes. It is common to find sales records kept separately from customer notes, or inventory data that is updated only occasionally. The result is slow turnaround times, duplicated effort and a lack of visibility across the business. Given that SMEs have such a huge influence on national economies, accounting for over 90% of all businesses, between 20-40% of GDP in some African countries, and a major source of employment, providing around 80% of jobs, these operational constraints have a broad impact on economies.
What has changed in recent years is that digital tools once seen as the preserve of larger companies have become more attainable for smaller operators. They do not remove the structural challenges SMEs face, but they can ease the load. Better systems do not replace judgement, experience or customer relationships; they simply give small companies more room to work with.
Cloud-based systems, automation and integrated customer-management tools have become more affordable and easier to deploy. They do not remove the structural pressures facing small businesses, but they can ease the operational load and create more space for productive work.
Doing more with the teams SMEs already have
Small teams often end up wearing several hats. One person might take customer calls, update stock records, handle service issues and manage follow-ups. When demand rises, these manual processes become harder to sustain. Local surveys regularly point to this strain, showing that smaller companies spend significant portions of the week on paperwork, compliance and routine administrative tasks – work that adds little value but cannot be ignored.
This is where automation is proving useful. Routine tasks such as onboarding new customers, checking documents, routing queries to the right person, logging interactions and sending follow-ups can now run quietly in the background. In larger companies, whole departments handle this work. In small businesses, the same burden has traditionally fallen on one or two people. When these processes run reliably without constant attention, a business with 10 employees can manage busier periods without rushed outsourcing or slipping service standards.
The point is not to replace staff, but to reduce the operational drag that limits what small teams can deliver. Structured workflows give SMEs a level of steadiness they have rarely had the time or money to build themselves.
Using better data to make better decisions
A second constraint facing SMEs is disorganised information. When customer details are lost in email, sales notes in chat groups, stock figures in spreadsheets and queries in separate systems, decisions depend on whatever information happens to be at hand. Forecasting becomes guesswork, and early warning signs are easy to miss.
Putting all this information in a single place changes the quality of decision-making. When sales, service and stock data can be viewed together, patterns become easier to spot: which products are moving, which customers are becoming less active, where delays tend to occur, and which periods consistently drive higher demand.
Importantly, SMEs do not need corporate analytics teams for this. Modern CRM platforms can organise information automatically and surface basic trends. For retailers preparing for 2026, this can help avoid over – or under – stocking. For service businesses, it can highlight customers who may be at risk of leaving, prompting earlier intervention. In competitive markets, having clearer information is a practical advantage.
Building a foundation before the pressure arrives
Rapid growth can be as destabilising for SMEs as an economic downturn. When orders increase, manual processes quickly reach their limit. Errors are more likely, staff become overwhelmed and the customer experience suffers. Many small businesses only upgrade their systems once these problems appear, by which time the cost, both financial and reputational, is already significant.
Putting basic workflow tools and a unified customer record in place early provides a useful buffer. Tasks follow the same steps every time, reducing inconsistency. Customers reach the right person more quickly. Staff spend less time checking or re-entering information and more time on work that matters. These small operational gains compound over time, especially during busy periods.
This is not about chasing every new technology. It is about avoiding a common pattern in the SME sector: when demand rises, systems buckle, and growth becomes more difficult.
Confidence matters as much as capability
Smaller companies understandably worry about risk when adopting new systems. Data protection, monitoring, and compliance can feel daunting without an IT department. The advantage of modern platforms is that many of these protections, like encryption, audit trails, and event monitoring, are built in. Transparent design also helps SMEs understand how automated decisions are made and how customer data is handled.
This reassurance is important because SMEs should not have to choose between improving their operations and protecting their customers’ information.
2026 will reward readiness
Technology will not replace the qualities that give SMEs their edge: personal service, flexibility, and the ability to respond quickly to customer needs. What it can do is relieve the administrative load that prevents those strengths from being fully used.
SMEs that invest in simple automation and better data practices now will enter 2026 with greater capacity and clearer insight. They won’t be competing with larger companies by matching their resources, but by removing the disadvantages that have traditionally held them back.
In the year ahead, the most competitive businesses will not be the biggest; they’ll be the ones that prepared early for the year ahead.
Linda Saunders is the Country Manager & Senior Director Solution Engineering for Africa at Salesforce
By Cyprian Rono
Africa’s quest to trade with itself has never been more urgent. With the African Continental Free Trade Area (AfCFTA) gaining momentum, governments are working to deepen intra-African commerce. The idea of “One African Market” is no longer aspirational; it is emerging as a strategic pathway for economic growth, job creation, and industrial competitiveness. Yet even as infrastructure and regulatory reforms advance, one fundamental question remains; how will Africa finance its cross-border trade, across markets with diverse currencies, regulations, and standards?
Today, only 15 to 18 percent of Africa’s internal trade happens within the continent, compared to 68 percent in Europe and 59 percent in Asia. Closing this gap is essential if AfCFTA is to deliver prosperity to Africa’s 1.3 billion people.
A major constraint is the continent’s huge trade finance deficit, which exceeds USD 81 billion annually, according to the African Development Bank. Small and medium-sized enterprises (SMEs), which provide more than 80 percent of the continent’s jobs, are the most affected. Many struggle with insufficient collateral, stringent risk profiling and compliance requirements that mirror international banking standards rather than the realities of African business.
To build integrated value chains, exporters and importers must operate within trusted, predictable, and interconnected financial systems. This requires strong pan-African financial institutions with both local knowledge and continental reach.
Homegrown trade finance is therefore indispensable. Pan-African banks combine deep domestic roots with extensive regional reach, making them the most credible engines for financing trade integration. By retaining financial activity within the continent, homegrown lenders reduce exposure to external shocks and keep liquidity circulating locally. They also strengthen existing regional payment infrastructure such as the Pan-African Payment and Settlement System (PAPSS), developed by the Africa Export-Import Bank (Afreximbank) and backed by the African Continental Free Trade Area (AfCFTA) Secretariat, enabling faster, cheaper and seamless cross-border payments across the continent.
Digital transformation amplifies this advantage. Real-time payments, seamless Know-Your-Customer (KYC) verification, automated credit scoring and consistent service delivery across markets are essential for intra-African trade. Institutions such as Ecobank, operating in 34 African countries with integrated core banking systems, demonstrate how such digital ecosystems can enable continent-wide commerce.
Platforms such as Ecobank’s Omni, Rapidtransfer and RapidCollect, together with digital account-opening services, make it much easier for traders to operate across borders. Rapidtransfer enables instant, secure payments across Ecobank’s 34-country network, reducing delays in regional trade, while RapidCollect gives cross-border enterprises the ability to receive payments from multiple African countries into a single account with real-time confirmation and automated reconciliation. Together, these solutions create an integrated digital ecosystem that lowers friction, accelerates payments, and strengthens intra-African commerce.
Trust, however, remains a significant barrier. Cross-border commerce depends on the confidence that partners will honour contracts, deliver goods as promised, pay on time, and present authentic documentation. Traders often lack reliable information on potential partners, operate under different regulatory regimes, and exchange documents that are difficult to verify across borders. This heightens the risk of fraud, non-payment, and contractual disputes, discouraging businesss from expanding beyond familiar markets.
Technology is closing this trust gap. Artificial Intelligence enables lenders to assess risk using alternative data for SMEs without formal credit histories. Distributed ledger tools make shipping documents, certificates of origin, and inspection reports tamper-proof. In addition, supply-chain visibility platforms enable real-time tracking of goods and cross-border digital KYC ensures that both buyers and sellers are verified before any transaction occurs.
Ecobank’s Single Trade Hub embodies this trust infrastructure by offering a secure digital marketplace where buyers and sellers can trade with confidence, even in markets where no prior relationships exist. The platform’s Trade Intelligence suite provides customers instant access to market data from customs information and product classification tools across 133 countries.
Through its unique features such as the classification of best import/export markets, over 25,000 market and industry reports, customs duty calculators, and local and universal customs classification codes, businesses can accurately assess market opportunities, anticipate trends, reduce compliance risks, and optimise supply chains, ultimately helping them compete and grow in regional and global markets.
SMEs need more than financing. Many operate in cash-heavy cycles where suppliers and logistics providers require upfront payment. Lenders can support these businesses with advisory services, business intelligence, compliance guidance, and platforms for secure partner verification, contract negotiation, and secure settlement of payments. Trade fairs, industry forums, and partnerships with chambers of commerce further build the trust networks needed for cross-border trade.
Ultimately, Africa’s path toward meaningful trade integration begins with financial integration. AfCFTA’s promise will only be realised when enterprises can trade with confidence, knowing that payments will be honoured, partners verified, and disputes resolved. This requires collaboration between banks, regulators, and trade institutions, alongside harmonised financial regulations, interoperable payment systems, and continent-wide verification networks.
Africa can no longer rely on external actors to finance its trade. Its economic transformation depends on strong, trusted, and digitally enabled African financial institutions that understand Africa’s unique risks and opportunities. By building an African-led trade finance ecosystem, the continent can unlock liquidity, reduce dependence on external currencies, empower SMEs, and retain more value locally. Africa’s trade revolution will accelerate when its financing is driven by African institutions, African systems, and African ambition.
Cyprian Rono is the Director of Corporate and Investment Banking for Kenya and EAC at Ecobank Kenya
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