African sovereign and institutional borrowers face an estimated $31 billion a year in excess financing costs. Meanwhile, 57 per cent of surveyed executives say trade finance for cross-border transactions is difficult or very difficult. The preliminary findings of the 2026 PAFTRAC Africa CEO Trade Survey describe financing costs as a barrier for businesses seeking to expand across the continent.
Who Bears Financing Costs
The Pan-African Private Sector Trade and Investment Committee (PAFTRAC) presented its findings at the World Trade Organisation (WTO) Public Forum in Geneva. More than 2,500 business executives took part in the survey, up from 400 respondents when it began in 2021.
Citing International Finance Corporation (IFC) analysis, PAFTRAC said the $31 billion annual excess cost reflects the pricing of African risk. Higher borrowing costs can also raise the cost of capital for businesses engaged in production, investment and cross-border trade. The findings put financing costs alongside the practical barriers businesses face when they try to trade within Africa.
The IFC estimates Africa's small and medium-sized enterprise (SME) financing gap exceeds $331 billion. Research by the IFC on four West African economies put the annual trade-finance shortfall at $14 billion. It found that better access to finance and lower costs could increase merchandise trade in those markets.
Trade Interest Meets Barriers
Despite these financing constraints, 81.3 per cent of executives expect their cross-border business activities to increase over the next 12 months. Intra-African commerce now ranks as the leading expansion destination among surveyed executives, ahead of China, Europe and the United States.
Yet that interest hasn't translated into a large share of the continent's merchandise exports. Intra-African merchandise trade accounts for about 15 to 18 per cent of Africa's total exports. The survey points to a gap between executives' interest in regional markets and the financing and institutional barriers that constrain trade.
Finance isn't the only obstacle. Respondents also identified limited awareness of some AfCFTA mechanisms, along with regulatory and logistical barriers. Although 70.2 per cent said AfCFTA-related reforms had already had a tangible impact on their businesses, more than half didn't know about the Pan-African Payment and Settlement System (PAPSS).
Rules and Payment Systems
PAPSS is designed to facilitate eligible cross-border payments in African currencies and reduce dependence on hard currencies for intra-African transactions. Still, the findings show that respondents' awareness of PAPSS and other trade-facilitation tools remains limited.
Trade infrastructure alone may not increase commerce when businesses can't obtain affordable finance, understand available mechanisms and navigate regulatory and logistical barriers, the survey says. For Nigeria and other major African economies, turning 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 findings put the scale of the task in figures. Executives are looking toward regional markets, but intra-African merchandise trade remains a minority of exports, and financing shortfalls persist. How quickly financial and institutional barriers come down could affect whether AfCFTA achieves the deeper regional integration envisaged by its architects.