Digital trade can cut costs by 30% – Afreximbank

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The African Export Import Bank Group Chief Economist and Managing Director of Research and Trade Intelligence, Yemi Kale, says digital trade systems can reduce transaction costs across Africa by as much as 30 per cent, a shift he described as essential to unlocking the continent’s competitiveness and lifting barriers that have held intra-African trade at low levels for decades.

Kale made the point on Thursday at a forum on trade intelligence and digital innovation held at the Afreximbank Africa Trade Centre in Abuja.

He said research had shown that “digital trade platforms can reduce transaction costs by up to at least 30 per cent”, adding that such efficiencies were no longer optional for African economies facing high logistics costs, fragmented markets, and slow cross-border payment processes.

Kale told participants that Africa stood at “a defining inflection point in its economic trajectory”, noting that the African Continental Free Trade Area had created a $3.4tn unified market of over 1.3 billion people.

However, he warned that integration alone would not deliver transformation unless digital systems were deployed at scale to solve long-standing structural problems.

According to him, intra-African trade still hovers between 15 and 18 per cent, far below Europe’s 60 per cent and Asia’s 40 per cent.

He said this gap was rooted in “fragmented markets that function in silos, high transaction and logistics costs that erode competitiveness, gaps in trade-related data and intelligence, and persistent cross-border payment frictions”.

Kale explained that digital technologies were already reshaping value chains globally and demonstrated how African economies could benefit from similar adoption.

He cited Rwanda’s digital single window, which “reduced export processing time by more than 90 per cent”, and the rise of mobile money systems processing more than $800bn annually as proof of what was possible when innovation meets trade.

He added that the African Payments and Settlement System was projected to save the continent billions by enabling cross-border payments in local currencies, removing one of the biggest frictions in regional commerce.

“Digital innovation is not just the engine of trade. It is the new highway on which African commerce will travel,” he said, stressing that early adopters would shape the continent’s competitive future.

Kale argued that digital transformation also democratises access for small businesses, which make up over 90 per cent of African enterprises. He recalled the example of a young leather-goods entrepreneur from Kano who struggled with export bottlenecks for years until she switched to digital trade platforms and digital payment tools.

“Her world changed almost overnight,” he said, noting that she now exports to Rwanda, Côte d’Ivoire, and Europe and employs more than 25 people. He said such stories showed how digital systems could convert local talent into continental and global opportunities, but warned that the impact would depend on the strength of the innovation ecosystem.

“Trade does not flourish in isolation. It thrives within ecosystems that enable ideas to grow and enterprises to scale,” he added. Kale described Nigeria’s youthful tech community as a major strategic asset, with 65 per cent of the population under 25.

He said young Nigerians were already “founding technology startups, writing software codes and shaping entirely new industries”, positioning the country to lead Africa’s digitally enabled trade expansion if infrastructure, regulation, skills, and finance keep pace.

He also highlighted Afreximbank’s ongoing work, including the Africa Trade Gateway, which integrates trade information, due diligence tools, secure payment systems, and market insights, and the network of Africa Trade Centres being developed across the continent.

The Abuja centre, he said, was designed as “a hub of innovation, integration and investment”, bringing under one roof conference facilities, SME incubation spaces, trade intelligence services and access to digital infrastructure.

Kale also urged African businesses and institutions to commit to digital transformation and collaboration. “If we are bold and forward-looking, Africa will not only participate in the global economy but will help to shape it,” he said.

He added that reducing costs, easing payments, and expanding access to market intelligence were critical steps if the continent was to unlock the full promise of the AfCFTA and allow its entrepreneurs to compete confidently on the world stage.

Also speaking, the Manager of Real Estate and Administration at Afreximbank, Oluwaseun Alabi, said the Africa Trade Centre in Abuja was conceived not just as a regional office but as a one-stop trade hub providing integrated trade information, finance, and business facilities to catalyse intra-African and extra-African trade.

He explained that the Abuja centre is the first in a planned network of Africa Trade Centres across the continent and the Caribbean, with the next facility in Harare scheduled to open to the public in June 2026.

Alabi disclosed that the Abuja ATC cost over $100m, was delivered in 41 months, and has already recorded more than 47,500 visitors, 34 trade-focused events, and hundreds of trade enquiries since its commissioning on April 10, 2025.

He added that the building is the first LEED Platinum-certified facility in Nigeria, the second in West Africa, and the 19th in Africa, underscoring Afreximbank’s push for sustainable infrastructure.

He stressed that the ATC will serve as a practical link between buyers, sellers, service providers, governments, financial institutions, and the wider trade community while hosting key Afreximbank platforms such as PAPSS and the Mansa due diligence system to support businesses from information to finance.

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