Feature/OPED
South Africa Reshapes its Democracy, Shows Readiness for Economic Transformation
By Professor Maurice Okoli
South Africa’s historic election results in late May 2024 were another credible testament which, by simple guiding definition, explicitly illustrated democracy as the aggregate will of the people. It was held as stipulated by its constitution. The diverse political expressions were presented through political parties, the African National Congress (ANC) and its largest rivals the Democratic Alliance (DA), the hard-left Economic Freedom Fighters (EFF), the Inkatha Freedom Party (IFP), and uMkhonto weSizwe Party. Minority parties had their chance to participate, which made it fair and free for electoral progress in South Africa.
This is unlike what happened in Nigeria the so-called giant of Africa, where an election process was mired with ballot box snatching, rigging, violence, and irregularities thereby totally undermining the will of the people.
Despite heightened criticisms, South Africa has illuminated an exemplary template of good governance. In most significant practice, adherence of good governance is one fundamental principle that African leaders have to uphold, as a guiding principle combined with transparency and accountability, to shy away from the shame of being accused over functional political irresponsibility.
Worth reiterating that the political initiative taken by the African National Congress, headed by President Cyril Ramaphosa, to form a coalition has set the rhythmical parameters for the evolutionary processes, without much resistance to the obvious glaring weaknesses and shortfalls of the past administration. The creation of the new executive government emboldened the concept of “unity in diversity” and would have to float a common understanding towards ratifying and removing the existing complexities and contradictions within the framework of aspirations stipulated in the constitution. In another context, it has some relevance for the current shifting geopolitical situation and emerging multipolar architecture.
With its chequered history behind it, South Africa needs comprehensive result-oriented development initiatives, and this can only come through striking compromise and consequently be adopted by the coalition government. The political stalwarts such as the Democratic Alliance (DA) and Inkatha Freedom Party (IFP), now grossly involved in treading the tricky balanced act approved by the parliament on June 14, 2024, raised unswerving hopes for South Africa, the southern African nation of approximately 62 million.
It was a breakthrough to merge political forces marking the ‘great beginning’ of a new chapter, as Economic Freedom Fighters, uMkhonto weSizwe, and other parties have remained antagonistic, and have been termed as the game-losers of the century, marking a significant shift in South African political history after 30 years of ANC dominance. It has some implications, though.
The preceding political agitations culminating in the coalition agreement marked the most significant political change since Nelson Mandela led the ANC to victory in 1994, ending apartheid. “Today is a historic day for our country,” DA leader John Steenhuisen stated, highlighting a new chapter focused on the nation’s interests and future. Similarly acknowledging all these without the least doubts, Ramaphosa described the success as “a remarkable change” and “It will once again be a privilege and pleasure to serve this great nation … (as) president,” said the 71-year-old Ramaphosa, emphasizing a new era of hope and cautious inclusivity. (1)
Tackling Existing Tasks
The newly created executive government would necessarily have to determine the scope of transformation, and the contours for a broader strategic economic resuscitation to uplift South Africa back to its status as Africa’s economic power and an influencer on the global stage, starting from the regional bloc, Southern African Development Community (SADC) and to continental organization, the African Union (AU).
As President Cyril Ramaphosa secured the second term, the preliminary pathway must lead towards tackling the existing pertinent issues that were raised during the election campaign and resulted in a fall of supporters (42%), below the simple majority, for the ANC.
Several reports monitored for this article, the ANC’s decline primarily stemmed from persistent issues such as high poverty, inequality, crime, rolling power cuts, and internal corruption. The DA’s entry into national government signifies a watershed moment for South Africa, as the party advocates for scrapping some of the ANC’s Black empowerment programs, aiming for good governance and a strong economy to benefit all citizens.
Perhaps, South Africa’s newly instituted government has to acknowledge the undeniably challenging future tasks that would require adopting suitable strategies for implementing a set of result-expected policy directions. Across the board, however, experts and investors have already welcomed the coalition, expecting policy continuity and accelerated reforms. It is worth mentioning here that the coalition agreement also outlines priorities, inextricably linked to comprehensive sustainable development, such as economic growth, job creation, land reform, infrastructure development, and fiscal sustainability.
South Africa is the fourth-most populous country in Africa, 80 per cent of the population is black, located entirely south of the equator, after Tanzania. But the most paramount feature is that South Africa has a mixed economy. South Africa’s economy is the most industrialized and technologically advanced in Africa respectively, and has the second largest economy in Africa, after Nigeria. According to research reports, South Africa has a private wealth of $651 billion making its population the richest in Africa followed by Egypt with $307 billion and Nigeria with $228 billion. (2) Despite these, South Africa is still burdened by a relatively high rate of poverty and unemployment and is ranked in the top ten countries in the world.
Unlike most of the world’s industrialized countries, Energy power outrages have bugged down industrial production and domestic utilization. Electricity deficits in an increasing headache across Africa, and the majority of the African countries lack access to this vital component. African Development Bank and African Import-Export Bank reports said half the total of Africa’s population has no daily access to electricity. The impact is considered simply as immeasurable, though surmountable. South Africa is currently the only country on the African continent that possesses a nuclear power plant. The primary electricity generator is Eskom, the utility is the largest producer of electricity in Africa and also needs capital repairs as the equipment is obsolete and experiences frequent breakdowns, consequently limiting the power supply.
Due to severe mismanagement and corruption at Eskom, the company is R392bn ($22bn) in debt and is unable to meet the demands of the South African power grid. Due to this, Eskom implemented load-shedding, which is periodically switching off electricity to specific power grids in specific time frames. In South Africa, load shedding is done to prevent a failure of the entire system when the demand for electricity strains the capacity of Eskom’s power-generating system. Load shedding is characterized by periods of widespread national-level rolling blackouts.
Dr Kelvin Kemm, a nuclear physicist and former chairman of the South African Nuclear Energy Corporation (NECSA), and current Chairman of Stratek Global, a nuclear project management company based in Pretoria, suggested in a report that the ultimate pathway forward, possibly the “energy mix” can effectively fill certain functions in electricity provision, but “much financial arm-twisting has taken place, in the forms of supposedly soft loans and other inducements to save mankind from the sins of the Industrial Revolution and modern day industrialists.” (4)
Under former President Jacob Zuma, the power crisis in South Africa steadily worsened, as the authorities tried to make up their minds on which direction to follow, according to Kemm. In reality, Zuma pushed for more nuclear power. However, this initiative was vehemently opposed by anti-nuclear green groups who are significantly funded by the countries exporting their green solutions. Zuma-era project to build an additional 9600 MW of nuclear power was torpedoed by the anti-nuclear greens. Then President Cyril Ramaphosa deposed President Jacob Zuma. A hallmark of the tenure of President Ramaphosa has been dithering and uncertainty. The country hoped for a show of strong leadership under President Ramaphosa, but that did not materialize. Thankfully, South Africa is now advancing the nuclear agenda not only by announcing the planned building of a new large nuclear power station but also by supporting the introduction of Small Modular Reactors.
Combined with the energy question discussed above, South Africa is widely infected by corruption. It scored 41 points out of 100 on the 2023 Corruption Perceptions Index. Notwithstanding that, more examples of corruptible governments are abounding in Africa. Critics noted that African leaders are fond of making unilateral decisions, and bartering natural resources without cabinet approval and parliamentary discussions. And according to critics, Africans consistently blame their poor performance on external factors. Corruption is a global phenomenon, but that socioeconomic cancer should be tackled seriously in South Africa.
Senior Writer Kate Whiting indicated, in her report on Transparency International’s Global Corruption Barometer, that Corruption is hindering Africa’s economic, political, and social development… More than this, it affects the well-being of individuals, families, and communities.” The report attributed the deterioration of the rule of law and democratic institutions, as well as a rapidly shrinking space for civil society and independent media to corruption in Africa.
Over the years from the apartheid era until today, there has been tremendous growth in multifaceted crimes across South Africa. Reasons could not be far-fetched, as, blacks are unemployed. The entire economy creates highly limited employment places, and again due to porous official policies. From April 2017 to March 2018, on average 57 murders were committed each day in South Africa. More than 526,000 South Africans were murdered from 1994 to 2019. As of February 2023, South Africa unbelievably has the sixth-highest crime rate in the world.
In an article headlined “Coalition Government: A Test For South Africa’s Democracy” published in June 2024, (5) Samir Bhattacharya, a research associate at Observer Research Foundation (ORF) in New Delhi, India, pointed to the possible impact on its future foreign policy and aspects of its implications. Moving forward, the next administration would need to give the country’s foreign policy issues serious attention, chief among them being the delicate balancing act between the West, China, and Russia. At a deeper level, the incoming administration must develop a realistic foreign policy agenda that inspires confidence among investors, both local and foreign. Due to its close ties to all of the superpowers and the BRICS countries, South Africa’s non-alignment approach to international affairs is unlikely to alter in the current environment.
However, there arises a firm need to keep in mind that South Africa still finds strength in its democratic system, which remains a cornerstone of stability and inclusivity. Due to its participation in numerous international issues and membership in groups such as the G20 and BRICS, South Africa is a significant global player. It has lately surpassed Nigeria to become the largest economy on the African continent. South Africa’s latest developments are closely watched not only in the continent but also globally.
Logical Glimpse into the Future
South Africa boasts of an excellent reputation on the global stage. It is also a member of the Southern African Development Community and the African Union. It is a founding member of the AU’s New Partnership for Africa’s Development. After apartheid ended, South Africa was readmitted to the Commonwealth of Nations. Chronicling history, Johannesburg hosted the latest XVI BRICS summit and continues to play a pivotal role in the BRICS association. China supported by Russia, in 2011, South Africa was enrolled into the informal association BRICS (Brazil, Russia, India, China, and South Africa). Jacob Zuma asserted that BRICS member countries would also work with each other through the UN, G20, and the India, Brazil South Africa (IBSA) forum.
According to local African and foreign critics, despite its widened bilateral relations with many foreign countries, and yet South Africa suffers from high youth unemployment, grappling with energy supply deficits, and many other economic obstacles discussed earlier in this article. Ramaphosa consistently attributes weak economic performance to external factors. In his speeches after the second inauguration on June 19, 2024, Ramaphosa unswervingly promised to embark on a swift and vigorous economic resuscitation of South Africa, and within the new geopolitical reality. Nonetheless, the past was seemingly a difficult time. Ramaphosa has to ‘walk the talk’ as illustrated by well-coined linguistic phrases to win the hearts of the working-class, entrepreneurs, and middle-class population. The logic behind his re-election and re-appointment signalizes a complete turning point and a new chapter, at first with steadfastness, cooperating and collaborating in a close-knitted manner with the broad coalition and stakeholders in readiness to adopt radical measures in dealing with the existing economic deficiencies, striving further to improve the economic status of South Africa. The new chapter brings in its fold the necessity to make contentious steps toward achieving visible economic progress and ensuring ultimate economic sovereignty, creating an inspiring bright future for the generations as stipulated within the constitution of South Africa.
References
- Official speeches by DA leader John Steenhuisen and ANC Cyril Ramaphosa made available on the websites (June 2024).
- “World Bank: South Africa” (PDF). Archived (PDF) from the original on 20 April 2023.
- Transparency International’s Global Corruption Barometer, April 2023 report.
- Ramaphosa’s Administration and the Electricity Challenges in South Africa. Dr Kelvin Kemm (May 2024) interview published by Eurasia Review.
- Samir Bhattacharya, Coalition Government: A Test For South Africa’s Democracy (June 2024), interview published by Global Research.
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: [email protected].
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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