Afreximbank Highlights Digital Trade’s Potential to Slash Costs by 30%

The African Export-Import Bank (Afreximbank) has emphasised the transformative potential of digital trade in reducing transaction costs for African businesses, estimating that full adoption of digital solutions could cut trade-related expenses by as much as 30 percent. The bank made the announcement during a recent forum on continental trade integration, stressing that technology-driven trade processes could unlock efficiency, enhance competitiveness, and strengthen Africa’s position in global markets.

According to Afreximbank officials, digital trade involves the use of technology platforms to facilitate cross-border transactions, streamline documentation, improve payment systems, and enhance logistics and supply chain management. By replacing traditional manual processes with digital solutions, businesses can reduce administrative delays, minimise errors, and improve transparency, all of which directly impact the cost and speed of trade operations.

Experts noted that one of the major barriers to trade in Africa has been the high cost and complexity of cross-border transactions. Businesses often face burdensome documentation requirements, protracted customs clearance, and opaque regulatory procedures. Digital trade platforms, they explained, can automate many of these processes, allowing exporters and importers to complete transactions faster, more efficiently, and at lower cost.

Afreximbank highlighted the benefits of adopting blockchain-based trade finance, electronic bills of lading, online payment solutions, and digital customs documentation. The bank pointed out that such technologies reduce the need for physical paperwork, decrease the risk of fraud, and provide real-time tracking of shipments. For small and medium-sized enterprises (SMEs), which constitute the backbone of Africa’s economy, these innovations are particularly valuable in improving access to international markets.

Officials also indicated that digital trade is central to achieving the objectives of the African Continental Free Trade Area (AfCFTA). By digitising trade processes, member states can harmonise regulations, enhance market transparency, and lower the costs of trading across borders. Afreximbank noted that reducing trade costs by up to 30 percent could significantly increase intra-African trade volumes, stimulate industrial growth, and boost economic diversification.

Industry analysts added that embracing digital trade is essential for competitiveness in the global economy. African exporters that leverage technology to streamline operations, manage supply chains efficiently, and access financing more easily are better positioned to compete with international counterparts. Enhanced digital infrastructure, they noted, would allow African businesses to attract foreign investors and expand into new markets.

The bank further emphasised that collaboration between financial institutions, technology providers, and regulators is critical to realising the full potential of digital trade. Stakeholders need to work together to establish secure payment systems, reliable data-sharing platforms, and harmonised regulatory frameworks that facilitate cross-border transactions while protecting businesses from cyber risks.

Afreximbank also highlighted that reducing trade costs has a multiplier effect on the economy. Lower transaction costs increase profit margins for exporters, which can be reinvested in production, innovation, and capacity expansion. Consumers also benefit from lower prices and improved availability of goods. In addition, digital trade enables faster settlement of transactions, thereby enhancing liquidity and reducing reliance on costly credit instruments.

SMEs stand to gain the most from these developments, as they have traditionally faced challenges in accessing finance and efficient logistics. Digital trade platforms can provide real-time access to trade finance, reduce delays in payment, and enable small businesses to engage with international buyers more effectively. Afreximbank noted that targeted interventions to support SMEs in adopting digital trade solutions could further accelerate Africa’s economic growth and industrialisation goals.

The bank’s announcement comes amid growing efforts by African countries to modernise trade systems, integrate technology into logistics and supply chains, and promote digital finance solutions. Governments and regional trade bodies are being encouraged to invest in infrastructure, digital platforms, and skills development to ensure that businesses can fully leverage the advantages of technology-driven trade.

 

In conclusion, Afreximbank’s findings highlight the substantial impact digital trade could have on Africa’s economic landscape. By reducing costs by up to 30 percent, streamlining transactions, and improving access to markets, digital trade has the potential to transform the continent’s export sector, stimulate industrialisation, and strengthen Africa’s participation in global commerce. As countries and businesses increasingly adopt these solutions, the bank predicts that Africa will experience higher trade volumes, increased competitiveness, and sustainable economic growth across the continent.