Inside Afreximbank's Trade Push to Shield Africa from Global Shocks

Inside Afreximbank’s Trade Push to Shield Africa from Global Shocks

Kenya and other African economies are being urged to fast-track regional trade integration as a buffer against rising global shocks, with fresh turmoil in the Middle East exposing vulnerabilities in fuel, food and fertiliser supply chains.

 Director of Trade Facilitation and Investment Promotion at the African Export-Import Bank (Afreximbank), Dr Gainmore Zanamwe, warned that Africa must urgently strengthen intra-continental trade to withstand external disruptions.

"Whenever we get global shocks, we need a system that enables us to absorb those shocks," Zanamwe said in a telephone interview with The Standard.

“Increasing trade and investment among ourselves (African countries) is the shock absorber. If we produce the manufactured goods and food we consume, we will be able to catalyse trade and deal with these external pressures."

His remarks come as oil-importing nations, including Kenya, grapple with supply disruptions triggered by escalating tensions involving the United States, Israel and Iran.

The effective closure of the Strait of Hormuz a critical artery for about one-fifth of global oil flows alongside attacks on energy infrastructure, has slashed global oil supplies by an estimated 11 million barrels per day, according to the International Energy Agency (IEA).

The ripple effects are already being felt beyond energy markets.

The International Fund for Agricultural Development (IFAD) warns that the escalating  conflict in the Middle East and Gulf region is fuelling volatility in global food, fertiliser and energy markets, with far-reaching consequences for smallholder farmers and rural communities.

Given the region’s central role in fertiliser production and global trade routes, disruptions are pushing up input costs and injecting uncertainty at a critical point in the agricultural calendar  particularly in low-income, food-importing economies. Rural communities remain especially exposed due to their heavy reliance on agriculture.

Key Gulf suppliers critical to Kenya’s fuel imports, including Saudi Aramco and ADNOC, have also faced operational setbacks. ADNOC has declared force majeure at some facilities following drone attacks, while insurers have raised premiums for shipping routes in the Gulf.

Brent crude prices have remained volatile, trading at about $96 (Sh12,480) per barrel this week after a temporary five-day pause in planned US strikes.

Against this backdrop, Zanamwe pointed to Africa’s emerging industrial capacity as a critical line of defence.

He cited Nigeria’s Dangote Refinery as a “success story” and an “epitome of industrialisation” capable of strengthening the continent’s energy security.

 The 650,000-barrel-per-day facility is already supplying refined petroleum products to five African countries, offering an alternative to traditional imports from the Gulf.

Zanamwe also highlighted Morocco’s OCP Group , the world’s largest exporter of phosphate fertilisers, as a key pillar in safeguarding Africa’s agricultural sector.

OCP has built industrial partnerships across the continent and rolled out soil-mapping programmes in over a dozen countries, helping to cushion against supply shocks at a time when global urea prices have surged to $585 (Sh76,000) per metric tonne  nearly 26 per cent higher than pre-conflict levels.

However, structural bottlenecks continue to hinder intra-African trade.

"One of the challenges is transport and logistics," Zanamwe said. "The current routes were designed to take raw materials out of the continent. We are now working on establishing African maritime routes where shipping lines can move throughout the continent – from Morocco all the way to Namibia, South Africa, and then to East Africa."

To address these gaps, Afreximbank has set up the African Export-Import Bank Trading and Distribution Company (AFTRACO), aimed at streamlining logistics and reducing inefficiencies in trade flows.

AFTRACO is designed to aggregate goods across countries and ensure balanced trade routes — for instance, enabling ships delivering fertiliser from Morocco to Kenya to return with Kenyan exports instead of sailing back empty.

In parallel, the bank is rolling out the Pan-African Payment and Settlement System (PAPSS) to reduce reliance on hard currencies such as the US dollar in intra-African trade.

"Right now, some trade is not taking place because people are waiting for hard currency. With PAPSS, we can work with African currencies to facilitate trade," Zanamwe said.

The system, adopted by the African Union as the official payment platform for the African Continental Free Trade Area (AfCFTA), is projected to save the continent up to $5 billion (Sh650 billion) annually in transaction costs.

Afreximbank is also backing a multi-billion-dollar Adjustment Fund to help countries offset tariff revenue losses linked to AfCFTA implementation.

Zanamwe urged Kenyan businesses to position themselves early for the fourth Intra-African Trade Fair (IATF2027), set to take place in Lagos, Nigeria.

The biennial event has emerged as a key marketplace for trade and investment deals across the continent.

The 2025 edition in Algiers recorded agreements worth $48.3 billion (Sh6.3 trillion) and drew over 112,000 participants from 132 countries, while the 2023 Cairo edition generated $43.7 billion (Sh5.68 trillion) in deals.

"We believe Nigeria will surpass the $50 billion (Sh6.5 trillion) target for investment deals," Zanamwe said, describing the Lagos event as the "mother of all trade fairs."

 "We are inviting the private sector to identify projects now. It’s not just about the big institutions; small and medium enterprises (SMEs) should bring their skills and products to the table."

His call aligns with Kenya’s broader push to position itself as a regional financial and logistics hub, following a recent Afreximbank-backed investment conference.

Even as global tensions show signs of easing after a temporary pause in US-Iran hostilities, Zanamwe insisted that long-term resilience lies in deeper regional integration.

 "Kenya has a range of investments and projects. We expect them to show up in big numbers in Lagos with well-prepared projects," he said.

 "We want people to share the information they need to trade. Once you identify the demand, it becomes easier to put in place the infrastructure."

 With global markets expected to remain volatile, analysts warn that building resilient regional supply chains is no longer optional.

While the IEA has proposed demand-side measures such as increased remote work and expanded public transport to reduce oil consumption, Afreximbank is betting on a more structural solution  building Africa’s production and trade capacity from within.

 "As global shocks become more frequent, the cost of waiting grows," Zanamwe said. "We have the tools like  AfCFTA, IATF, and PAPSS  to bridge the trade gap. What we need now is the determination to use them."