The African Development Bank Group (AfDB) and Nedbank Limited have taken a new step in strengthening trade finance in Africa with the signing of a $60 million risk participation agreement. The announcement was made on 19 December 2025 in Pretoria, marking a strategic milestone in support of intra-African trade flows, particularly in low-income countries and transition states.
A Key Mechanism to Bridge the Trade Finance Gap
This risk-sharing agreement is designed to secure trade finance operations carried out by Nedbank in partnership with African local banks, notably through documentary letters of credit and other trade instruments. By providing partial credit risk coverage, the AfDB enables Nedbank to expand its activities in markets often perceived as too risky by traditional financial institutions.
At a time when Africa’s annual trade finance gap is estimated at several tens of billions of dollars, this mechanism represents a critical lever to smooth supply chains, support strategic imports, and stimulate regional exports.
Direct Support for Intra-African Trade
The agreement fully aligns with the AfDB’s priorities to promote intra-African trade, a central pillar of the African Continental Free Trade Area (AfCFTA). By improving access to credit for local banks, it allows African businesses—particularly SMEs—to secure trade transactions, reduce financing costs, and shorten logistics lead times.
According to Kennedy Mbekeani, Director General for Southern Africa at the African Development Bank, the partnership “unlocks essential financing where it is most needed, while strengthening the resilience of Africa’s financial system.”
A Strategy Aligned with Africa’s Economic Transformation
Beyond its immediate financial impact, the $60 million agreement is part of the African Development Bank’s Ten-Year Strategy 2024–2033, which focuses on industrialization, regional integration, and improving living conditions across the continent.
For transport, logistics, and supply chain stakeholders, such mechanisms are crucial: without adequate trade finance, road, port, and rail corridors remain underutilized. By supporting trade flows, the AfDB and Nedbank indirectly help secure and energize Africa’s entire logistics ecosystem.
