Commerce thrives when barriers are lifted, and opportunities are shared. Unfortunately, history shows that progress in trade has often excluded half the population from its full benefits. 

To learn more about gender issues in trade, treasury, and payments, Mahika Ravi Shankar of Trade Finance Global (TFG) spoke with Gwen Mwaba, Afreximbank’s Managing Director of Trade Finance and Correspondent Banking, at TFG’s annual Women in Trade Treasury and Payments event in London. 

Women, particularly those in emerging markets, often face unique struggles that hinder their ability to participate fully in the global economy, such as limited access to education, outdated legal systems, and restrictive inheritance laws. 

Without the right to own property in some regions, securing financing becomes nearly impossible shackling many organisations to their small business status. When businesses remain small because they cannot finance the growth waiting for them, the entire economy suffers.

Mwaba said, “A woman in trade can be a leader of a big organisation, but that’s the minority. The majority of ‘women in trade’ in emerging markets would be the women selling goods in a marketplace or the women carrying cash across the border from one country to another to buy goods that are required in their country.”

Many of these African women engage in commerce as street vendors or cross-border traders, but see their contributions go underrecognised. Many are becoming farmers, turning to agriculture as a viable and promising career. Yet, systemic obstacles persist that the financial sector will have a role in overcoming.

Institutions have begun focusing on the economic inclusion of women through targeted programs. Liquidity solutions for small and medium-sized enterprises (SMEs) provide a lifeline. When credit becomes accessible, business owners can expand operations, hire more workers, and bolster their communities in the process. 

Beyond funding, visibility matters. Placing women in leadership allows young girls to see someone like them in charge, encouraging them to dream big. It also ensures decision-making reflects diverse perspectives and does what is best for the organisation and economy as a whole, rather than just a gender-biased subset.

Mwaba said, “There are a number of unique challenges that are very specific to a continent like Africa. Some of those include things like a lack of access to education for young girls. Boys still tend to be favoured, and many families would rather pay for the male child to go to school than the female children.”

These issues demand attention. Collective advocacy strengthens the case for practical solutions that allow women to thrive in both business and family life.

Trade, treasury, and payments have historically been male-dominated but that reality is beginning to shift as more women enter the sector, find success, and push for broader representation. A big step also comes from recognising that no two ‘women in trade’ are alike, that unique circumstances demand unique solutions.

The next step involves dismantling outdated norms, promoting financial inclusion, and ensuring women are positioned as leaders, not just contributors. The momentum exists. What happens next depends on those willing to drive change.

The post VIDEO | The role of women in Africa’s trade and finance appeared first on Trade Finance Global.

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Trade Finance Global’s (TFG) annual Women in Trade, Treasury, and Payments campaign in 2024 focused on Inspiring Inclusion around the globe. Different regions face different challenges when it comes to gender inclusion, and it is vital to understand perspectives from across the globe.

To learn more about the challenges that women face in the trade, treasury, and payments space across the African continent, and some of the programmes in place to help balance the scales, TFG spoke with Gwen Mwaba, Director and Global Head of Trade Finance at Afreximbank.

Afreximbank’s role in addressing gender equality

Women in Africa aiming to accelerate their careers in trade, treasury, and payments face several significant challenges, including societal pressures, which sometimes dictate women’s roles and affect their career opportunities. 

Additionally, women can encounter obstacles in career advancement due to periods of maternity leave, which can put them behind their male counterparts. Many women also lack sufficient role models in leadership positions within their fields.

Mwaba said, “The reality is that trade is not gender balanced, particularly across developing and emerging markets.”

This is something that Afreximbank focusses on addressing in order to support, include, and empower women across the continent. 

The bank has implemented various initiatives to provide mentorship and training programmes to upskill female employees and attract more women into the industry. These efforts are part of a broader strategy to build capacity and offer support systems that enable women to navigate their careers more effectively, including overcoming organisational challenges. 

Beyond internal initiatives, Afreximbank extends its support to African female entrepreneurs, offering targeted programmes to facilitate their involvement in trade and access to essential information and financial resources. 

Through these comprehensive measures, the bank is making significant strides in empowering women in Africa, helping to overcome the generations of embedded challenges.

Impact of Afreximbank’s work

Afreximbank’s Trade Information Portal is one initiative that has helped to democratise access to trade information and is helping to level the playing field for women in trade. 

The Trade Information portal, which is available under the Afreximbank’s digital ecosystem the Africa Trade Gateway (ATG), offers a subscription-based service where entrepreneurs, at no initial cost for the free limited access version, can access information about market needs and opportunities in neighbouring countries. This information is crucial for women looking to export goods and services, empowering them to make informed decisions and identify viable markets for their products.

The bank’s role in promoting successful female-led enterprises further highlights its impact. 

Mwaba said, “We have a very successful client in the cocoa industry in Ghana. She started as a cocoa bean trader, but we encouraged her to set up a manufacturing plant, which Afreximbank financed. Now, the company is semi-processing cocoa beans into cocoa cake, cocoa liquor, and cocoa butter for export to manufacturers of finished products outside of Africa. 

“What is exciting about this business is that it is owned by a woman who is also the CEO, her CFO is a woman, her entire senior management team are women, and the people on the shop floor are women. 

“That’s just one example of Afreximbank’s initiatives to support women entrepreneurs.” 

However, supporting entrepreneurs in today’s technology-driven economy also requires a dedicated digital approach.

How can digital education help women?

Afreximbank is strategically positioned to enhance and promote digital education among African female entrepreneurs, enabling them to participate more fully in digital trade. 

The bank’s approach to digital education – which is no longer just an advantage but a necessity for staying competitive in the global market – involves providing digital solutions and training to ensure users can fully leverage these technologies.

One digital initiative which can also be accessed on ATG is the Mansa Digital Platform, a KYC repository that simplifies the verification process for corporates and banks. This platform is instrumental in helping entrepreneurs gain quicker access to financial services by streamlining the due diligence process for potential lenders.

Mwaba said, “Once you are Mansa verified, it’s easy for banks to provide you with solutions. Within that ecosystem (ATG), we have also developed a digital solution called the Africa Trade Exchange (ATEX), which is a digital exchange for buying and selling all manner of commodities.”

To further support ATEX, Afreximbank is the payment bank and will link ATEX to the payment platform, the Pan African Payment and Settlement System (PAPSS) which facilitates transactions in local currencies. 

For example, PAPSS would allow a seller in Kenya to receive Kenyan shillings for goods that they sell to a buyer in Rwanda, who pays in Rwandan Francs. This system significantly reduces the reliance on foreign currencies, making trade more accessible and cost-effective for African entrepreneurs.

For Afreximbank, however, the digital journey is about more than just providing access to these technology platforms. It is also about training and education. 

The bank ensures that users of its digital solutions receive comprehensive training, empowering them with the skills needed to navigate and maximise the benefits the digital solutions provide. 

Mwaba said, “Through our HR department we offer Afreximbank academy AFRACAD, which has a number of digital and non-digital courses accessible to people who want to upskill themselves in anything to do with banking and trade.”

This effort enables women to trade more effectively in the digital realm and contributes to fostering inclusivity and empowerment in the African trade sector. Afreximbank plans to continue this momentum by rolling out new initiatives in the years to come.

Looking to an inclusive future

One of the initiatives the bank is driving is the establishment of Export Trading Companies (ETCs), which seek to overcome one of the significant challenges female entrepreneurs face: the inability to export due to the small size of their operations. 

Mwaba said, “This model entails aggregating goods from different markets to create scale. For example, you have many sesame seed producers who, on their own, are too small to be able to export. 

“This ETC initiative would aggregate sesame seeds into one location with the highest comparative advantage, package and brand them under one label and, using that volume, export them outside Africa.” 

Additionally, Afreximbank is spearheading the development of industrial parks focused on light manufacturing across Africa. These industrial parks would provide a conducive environment for entrepreneurs who engage in light manufacturing, such as producing small electrical components or garments, and are well suited to women due to their scalability and potential for job creation.

Through these and other programmes, the bank continues to pave the way for a more equitable and prosperous future for women in trade across the continent. A future that will inspire inclusion for all.Mwaba said, “To me, Inspire Inclusion means you can’t be all things to all people. Just be the best version of yourself can be.”

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Africa stands on the brink of remarkable economic growth. If given the right tools and with the support of the international community, the continent could truly become unstoppable. 

Yet, holding it back are cascading and intertwined challenges, with access to trade finance surfacing as a major impediment to its economic progress.

At ITFA’s 49th Annual International Trade and Forfaiting Conference in Abu Dhabi, TFG’s Deepesh Patel sat down with Gwen Mwaba, Director & Global Head, Trade Finance at African Export-Import Bank (Afreximbank). Their discussion revolved around the pressing issues facing African trade finance and the active role of DFIs in fostering African trade. 

Navigating challenges: African trade finance in focus

Trade finance is an important instrument for shaping Africa’s economic development and structural transformation. 

Despite its significance, Africa as a continent has yet to fully realise the growth-enhancing benefits of trade finance. Mwaba set forth the following key barriers restricting the continent’s access to trade finance: 

• De-risking: The recurring trend of international banks resorting to major de-risking during periods of crisis. Mwaba observed, “Every time there’s any form of crisis, we see major de-risking by international banks.” 
• Sovereign debt levels: Mwaba drew attention to another concern: the escalating debt levels among African sovereigns which exert immense pressure on African economies. She underscored, “The increasing debt levels by African sovereigns puts a lot of pressure on African economies, particularly when it comes to the availability of foreign exchange given the amount of foreign exchange that has to be redirected to foreign debt service.”
• Climate change: African nations bear the disproportionate impacts of climate change, despite their minimal contributions to global carbon emissions. As Mwaba pointed out, “Out of the ten countries globally most impacted by climate change, seven of those countries are in Africa.” 

Tackling climate change through DFIs

Development Finance Institutions (DFIs) are pivotal in the fight against climate change. Acknowledging the importance of tackling climate change for Africa’s economy, Afreximbank adopts a comprehensive approach that not only supports green energy projects but also climate adaptation. 

Mwaba said, “At Afreximbank, we appreciate that whilst we need to transition through all the new ESG requirements, we also need to look at climate adaptation so that the African countries that are most impacted by climate change can overcome that challenge.” 

Financing projects such as dams is essential in countering challenges like droughts and bolstering mega-farming initiatives that rely on extensive irrigation rather than rain-fed crops. 

Encouraging entrepreneurship and Intra-African trade

While African entrepreneurs keenly recognise opportunities, access to finance remains their foremost obstacle. Mwaba emphasised the need for education and awareness regarding the solutions available through Africa-focused DFIs, like Afreximbank, all of which are eager to fund transformative projects. 

Furthermore, Afreximbank has established a project preparation unit to help fund feasibility studies for early-stage projects.

According to Mwaba, “We have a project preparation unit where a project promoter can access funding to fund the feasibility study. If the feasibility study is successful, the advance gets bundled into the longer-term financing that is lent to the project.” 

Additionally, in its pursuit of advancing the implementation of the African Continental Free Trade Agreement (AfCFTA), Afreximbank introduced the ‘AfCFTA Adjustment Fund’ aiming to address the concerns of countries hesitant to adopt AfCFTA due to potential revenue losses. 

“Some countries are hesitant due to the perceived loss of revenue. Because of this, Afreximbank has created an AfCFTA Adjustment Fund to compensate for the initial revenue loss, as equilibrium will eventually be reached with increased trade volumes,” she explained. 

This initiative showcases Afreximbank’s dedication to promoting trade and economic growth across the continent.

The post Video | Afreximbank: Most pressing challenges facing African trade, and how to address these appeared first on Trade Finance Global.

Africa’s global share of trade has declined from 5.5% in 1960 to 2.6% in 2018. For Africa, the trade finance gap has been estimated at USD 110-120 billion. TFG spoke to Afreximbank on the challenges and opportunities that lie ahead.

Africa has a long history of trade. As early as the seventh century, trans-Saharan trade routes enabled the supply of gold from sub-Saharan Africa to the Mediterranean economies of North Africa in exchange for salt. By the 14th century the fabled emperor Mansa Musa, of the Malian empire, was one of the wealthiest men in the world, controlling the flow of gold between Africa and the Mediterranean.

In the contemporary world, however, Africa’s share of world trade, which declined from 5.5% in 1960 to 2.6 % in 2018, has been marginal. Also, while intra-African trade has increased from 5 % of Africa’s total trade in 1980 to 16 % in 2018, it continues to remain low relative to intra-regional trade in other regions including Europe and Asia. 

Trade is widely recognized as critical to economic growth and prosperity and Africa’s low share of world trade has been the subject of various studies over the years. These have generally focused on the composition of the physical economy to identify constraining factors and recommend appropriate growth strategies. These factors include the continued reliance of African economies on primary commodities in a global trading system dominated by manufactured goods, and tariff and non-tariff barriers within the continent. More recent studies have started paying attention to the role of trade finance in the growth of trade, and it is increasingly acknowledged that trade finance or supply chain finance (SCF) are critical to trade flows. The World Trade Organization and others suggest that as much as 80 % of annual global merchandise trade is enabled through some form of trade financing, including both traditional trade finance and SCF, and encompassing both financing and a range of risk mitigation solutions. “A sizeable trade finance gap is a drag on trade, growth, and job creation,” says Steven Beck, Head of Trade Finance at ADB.

For Africa, the trade finance gap has been estimated at USD 110-120 billion by the African Development Bank.  The adverse impact of this is most acutely felt by the small and medium enterprises (SMEs), which face a higher rejection rate of trade finance applications relative to large corporates. The high rejection rates are not solely attributable to poor credit quality, with compliance constraints and the inability of clients to provide high quality KYC being cited by banks as a major factor. SMEs account for 70% of the number of firms on the continent and employ 80 % of its workforce. Bridging the trade finance gap, especially for the SME segment, is thus a key challenge for financial institutions in the African market. 

Globally, trade growth has been facilitated by open account trading which reduces reliance on traditional trade finance instruments such as letters of credit, guarantees, SBLCs, and collections, and shortens the transaction cycle. 

Open account trading is typically supported by SCF products including Factoring, Receivables Finance and Payables Finance, and BCG estimates that open account trade now accounts for 45 % of trade finance revenues globally. Banks in Africa responding to ICC’s Global Survey in Trade Finance 2018, however, reported that traditional trade finance still comprises 88% of their trade finance portfolios with 72 % of respondents citing letters of credit as their preferred instrument. Africa accounts for only 1 % of global factoring transactions, and the limited availability of payables finance programs across the continent has resulted in low penetration levels.

While supply chain finance volumes in Africa are currently modest, there have been encouraging developments which augur well for the future. Between 2015 and 2018, factoring volumes have grown from EUR 18 billion to EUR 22 billion, a growth of 18 %. Significantly, while factoring activity has thus far been concentrated in only 5 of Africa’s 55 countries, a number of factoring companies are now emerging across the continent and volumes are projected to exceed USD 50 billion by 2025. Similarly, a number of banks are actively pursuing commencement or scaling up of payables finance offerings across various geographies. This product is expected to grow rapidly as banks’ marketing efforts lead to increased awareness and adoption.

As a trade finance focused development institution, Afreximbank is pursuing various initiatives to address the trade finance gap in Africa. The bank has led the way in introducing factoring and forfaiting and has done pioneering work in awareness and capacity building for these products across Africa in partnership with other institutions. Afreximbank has also developed and proposed a model factoring law for adoption by individual countries. 

As the next step on the journey to increase availability of supply chain finance, the bank plans to introduce payables finance in various geographies in partnership with local and regional banks, accompanied by awareness and capacity building programs. Payables Finance opens up an additional source of bank finance for suppliers, who are often SMEs, and provides comfort to banks as credit risk is transferred to better rated corporate buyers. It is expected that these features will lead to increased adoption of payables finance on the continent in line with the rapid growth witnessed in other regions.

In order to facilitate the KYC process and reduce transaction rejection rates, Afreximbank has developed MANSA, an Africa focused KYC repository. The relevance of this initiative is borne out by the BNY Mellon Global Survey 2019 which identified centralised KYC databases as the most effective technology solution for addressing compliance issues. 

Afreximbank’s trade promotion initiatives also include the Pan African Payments and Settlement System (PAPSS) which is being developed to facilitate net settlements between African countries for intra-African trade, and which will complement implementation of the African Continental Free Trade Area (AfCFTA) in 2020. In addition, the second biennial Intra African Trade Fair is being organised by the bank in 2020 to bring together sellers and buyers from across the continent with a target of facilitating trade and investment deals aggregating USD 40 billion.

The African continent, which is home to 1.2 billion people across 55 countries, and whose landmass exceeds the combined landmass of China, India, Europe and the U.S.A., is poised to see internal trade barriers coming down as AfCFTA is implemented. The simultaneous growth of trade and supply chain finance and bridging of the trade finance gap will further boost both intra and extra African trade, and Africa’s trade routes are set to get busier. Mansa Musa would have been pleased.   

The post Afreximbank: Accelerating the growth of African trade appeared first on Trade Finance Global.