African businesses face steep financing costs and limited access to trade finance as they try to expand across the continent, according to preliminary findings from the 2026 PAFTRAC Africa CEO Trade Survey. The figures describe a system in which businesses want to trade regionally but encounter financial and institutional barriers before that ambition can become commerce.
The cost of crossing borders
Fifty-seven per cent of surveyed executives said obtaining trade finance for cross-border transactions was difficult or very difficult. The obstacle sits directly between businesses and the regional markets they hope to reach: financing is hard to secure, while borrowing costs raise the cost of production, investment and trade.
The Pan-African Private Sector Trade and Investment Committee survey covers more than 2,500 business executives. It began with 400 respondents in 2021. Among those surveyed, 81.3 per cent expect their cross-border business activities to increase over the next 12 months. That expectation runs into the reported financing barriers; it doesn’t erase them.
PAFTRAC, citing International Finance Corporation analysis, said African sovereign and institutional borrowers face an estimated $31 billion annually in excess financing costs associated with the pricing of African risk. Those costs reach beyond public and institutional borrowers: higher borrowing costs can also raise the cost of capital for businesses involved in production, investment and cross-border trade.
The IFC estimates that Africa’s small and medium-sized enterprise financing gap exceeds $331 billion. Its research on four West African economies estimated an annual trade-finance shortfall of $14 billion. The research also found that better access to finance and lower financing costs could increase merchandise trade in those markets. The shortfall puts pressure on smaller businesses, while credit costs shape who can participate in regional commerce.
Interest meets institutional barriers
Intra-African commerce has become the leading expansion destination among surveyed executives, ahead of China, Europe and the United States. Yet intra-African merchandise trade remains about 15 to 18 per cent of Africa’s total exports. The gap between stated business interest and actual trade persists alongside financing constraints and uneven implementation of the African Continental Free Trade Area, or AfCFTA.
Some AfCFTA mechanisms remain unfamiliar to the businesses they’re meant to serve. Although 70.2 per cent of respondents said AfCFTA-related reforms had already had a tangible impact on their businesses, more than half were unfamiliar with the Pan-African Payment and Settlement System, known as PAPSS.
PAPSS is designed to facilitate eligible cross-border payments in African currencies and reduce dependence on hard currencies for intra-African transactions. Awareness of other trade-facilitation tools also remained limited, according to the survey. A payment system on paper won’t remove barriers for businesses that don’t know how to use it.
The gap between promises and practice
The findings say trade infrastructure alone may not be enough to increase commerce. Businesses also need affordable finance, knowledge of available mechanisms, and the ability to navigate regulatory and logistical barriers. The survey points to an implementation problem alongside the financing gap: regional rules and tools don’t automatically make cross-border trade accessible.
For Nigeria and other major African economies, converting private-sector interest in regional markets into increased trade will require lower transaction and financing costs, wider access to trade finance, more effective payment systems and stronger implementation of AfCFTA rules. The survey describes growing interest in trading across the continent, but also the financial and institutional obstacles businesses still face. Whether those barriers come down will affect whether AfCFTA achieves the deeper regional integration its architects envisaged.