Bank of All Trades

When Esther John started trading maize in her twenties, she relied on panya routes.

These were informal backroads carved through the bush, linking one dusty border town to the next.

Narrow by design, they stayed out of sight from customs officers, border posts, and anyone asking for paperwork or bribes.

Now, she trades through formal channels.

Her maize crosses at Namanga between Kenya and Tanzania, then through Mutukula into Uganda, and finally into the DRC at Bunagana.

Esther is part of a growing network of cross-border traders choosing formality over the shadows.

But legitimacy hasn’t made things easier.

She now faces four tax regimes and four currencies, with daily rate swings that rarely work in her favor.

The paperwork slows her down, and transporters charge extra to wait.

But none of that compares to the hardest part: financing.

Trade finance, when it exists, isn’t built for traders like Esther.

It’s built for importers with warehouses, manufacturers with audited books, and companies with collateral and clean paper trails.

Esther leans on informal supplier credit or borrows from lenders whose interest rates bite.

And this isn’t new.

Globally, 80-90% of trade relies on financing tools like:

• Letters of Credit (LCs): A bank document promising that exporters will be paid once conditions are met

• Import Finance: Short-term capital to help businesses buy goods from abroad

• Payables Finance (Reverse Factoring): A financier pays the supplier upfront, then collects from the buyer later.

But in Africa, such tools are hard to access.

Local banks lack the liquidity, infrastructure, and credit risk frameworks to issue them.

Global banks, spooked by compliance risks, prefer to look away.

The result?

A trade finance gap that the African Development Bank now estimates at $120 billion dollars and growing.

That’s the gap Afreximbank was built to close, and the reason its story matters far beyond its Cairo headquarters.

A bet on African Trade

The early 1990s came on the heels of what many called Africa’s “lost decade.”

By the end of the 80s, external debt had hit 190 billion dollars, and over 30 countries were locked in IMF structural adjustment programs.

The prescriptions were brutal: slash public spending and open up markets.

The result?

Public institutions were gutted, credit dried up, and local banks became too cautious to move.

Africa was a risk with no upside: shaky regulation, high default rates, and no safety net.

Trade, which relies on trust and liquidity, was left with neither.

Multilaterals like the World Bank had the firepower but not the focus.

Their job was to stabilize economies - not finance shipments of cocoa, cement, or maize.

So trade kept moving, but through informal channels, without structured support from the financial system.

Then, in 1993, came a pivot.

Babacar Ndiaye, then President of the African Development Bank, believed Africa could build its own trade finance engine.

He got the AfDB’s green light in May, 1993.

By October, African states and partners gathered in Abuja to launch what would become Afreximbank.

• Cairo was chosen as the HQ

• Nigeria nominated the first president

• Early shareholders included Egypt, Côte d’Ivoire, Ethiopia, Tunisia, China, Standard Chartered, and the AfDB

At the time, Nigeria’s export credit agency was led by Christopher Edordu, a respected banker steeped in trade finance.

He was tapped to become Afreximbank’s first president.

One of his deputies, a young economist named Benedict Oramah, quit on the spot to join him.

By 1994, Afreximbank opened its doors with a six-person team working out of a Cairo hotel.

Their first deal?

A 6.5 million dollar syndicated loan to Ghana’s Cocoa Board.

The bank joined a group of lenders to de-risk and fund one of the country’s most critical export sectors.

Afreximbank moved with discipline. And in its first years, they didn’t book a single bad loan.

That cautious start now anchors a billion dollar institution at the heart of Africa’s trade ambitions.

Building the architecture of African trade

From a six-person team in a Cairo hotel, Afreximbank has come a long way.

In 2024, the bank disbursed $17.5 billion to traders across Africa.

By 2026, it plans to double that to $40 billion.

They want to shrink the $100 billion trade finance gap that still holds African businesses back, especially SMEs trying to scale across borders.

But beyond moving capital, Afreximbank is also building systems.

On 1 January 2021, the African Continental Free Trade Area (AfCFTA) came into force.

The goal was bold: unlock a single African market, reduce barriers, and accelerate industrial growth.

But one problem stood in the way - payments.

With over 40 national currencies and limited convertibility, cross-border trade remained expensive, slow, and tied to the US dollar.

That changed in January 2022, when Afreximbank launched the Pan-African Payment and Settlement System (PAPSS), in partnership with the African Union and the AfCFTA Secretariat.

Before PAPSS, paying across African borders was a costly relay.

A business in Ghana paying a supplier in Kenya had to convert cedis to dollars, route the payment through a correspondent bank in New York or London, and wait days for it to land, before being converted to shillings.

Every handoff added fees, delays, and exposure to currency swings.

Now, both sides trade in their own currencies.

The system handles the conversion and settlement through participating central banks.

As of 2025, PAPSS is live in 16 countries, linked to 15 central banks and more than 150 commercial banks.

In March this year, KCB Bank in Kenya and Bank of Kigali in Rwanda became the first commercial banks to adopt PAPSS in their respective countries.

It’s a sign of growing uptake beyond the original pilot countries in the West African Monetary Zone.

And it’s a reminder that building the rails for African trade is as important as financing the cargo moving on them.

Trade Needs More than Credit

While lending is crucial, it doesn’t build industries on its own.
Not in African markets where currencies swing, commodities spike, and capital retreats at the first sign of trouble.

You need patient capital.

The kind that takes risk, stays the course, and absorbs shocks.

That’s the logic behind the Fund for Export Development in Africa (FEDA), launched by Afreximbank in 2021.

It was built to channel long-term equity into sectors like manufacturing, logistics, financial services, and tech - industries essential to trade, but often locked out of scale capital.

That same instinct runs through Afreximbank’s crisis playbook.

Post covid-19 pandemic, it rolled out a $7 billion facility to keep trade and essential imports moving.

When the Russia–Ukraine war sent food and fuel prices soaring, it followed with a $4 billion programme to help governments absorb the blow.

But such interventions don’t happen without financial muscle.

As of Q1 2025:

• Total assets reached $42.7 billion, up from $40.1 billion just three months earlier

• Liquid assets now make up 20 percent of the balance sheet, giving it room to move

• Net interest income crossed $411 million

• Non-performing loans remain low at 2.44 percent

What the Future Holds

Afreximbank is entering a pivotal chapter in its 32-year run.

In June, Professor Benedict Oramah stepped down after a decade as president, and after turning the bank into something far more assertive than the cautious lender it once was.

Under his watch, Afreximbank held the line through COVID’s trade paralysis and the commodity shocks that followed Russia’s invasion of Ukraine.

His successor, Dr. George Elombi, knows the institution well.

He's been inside it for over two decades, so the handover signals continuity at the top.

Dr. Elombi inherits a bank looking across the Atlantic.

Afreximbank is courting Caribbean nations to join as member states, a move rooted in both economics and shared history.

It’s a bid to revive old trade routes and open new corridors for capital, commerce, and influence.

But he also inherits a bank under a microscope.

In July 2025, Moody’s cut Afreximbank’s credit rating, warning that the bank is taking on risky government loans and relying on a limited pool of funding.

Fitch had issued a similar downgrade weeks earlier.

For a bank that raises money on global markets, ratings matter. They set the price of borrowing and shape investor appetite.

Afreximbank fired back, calling Fitch’s analysis “erroneous” and “detached from the bank’s fundamentals.”

But that fight is more than a war of words.

It opens the door to a deeper question about the bank’s identity and direction.

A Touch of Wall Street

Afreximbank was born in 1993 with one big advantage: preferred creditor status.

It’s a privilege reserved for development banks - institutions designed to take risks others won’t, and to keep lending when everyone else pulls out.

Preferred status reassures investors they’ll still be standing when the dust settles.

But that protection only works if the world still sees you as a development bank.

As Afreximbank ramps up commercial lending and equity bets, that line is starting to blur.

And some people are asking: is this still a mission-driven lender or just another bank chasing margins?

The distinction matters.

If its preferred creditor status is ever tested and rejected, its risk profile could change overnight.

But Afreximbank isn’t just defending its model from ratings agencies and skeptics.

It’s defending it from something faster: Tech.

In 2025, the bank launched the African Currency Marketplace - a blockchain-based extension of PAPSS that lets businesses swap African currencies directly, in real time, without touching the dollar or euro.

The goal is to cut out forex middlemen and stitch together a continent split by 42 currencies and 861 broken payment corridors.

But it’s also a hedge.

Afreximbank is building centralized systems, but traders across the continent are already turning to decentralized ones.

By mid-2023, stablecoins accounted for nearly 30% of crypto volume in Sub-Saharan Africa, with over $23 billion flowing in.

If Afreximbank can plug its platform into this emerging layer of digital trade, it might keep its seat at the table.

If not, the future of African payments could move on without it.

My Final Take

For traders like Esther John, the story of Afreximbank is not an abstract one.

The ability to move maize from Kenya to DRC without paying four sets of currency conversion fees, or to secure affordable working capital without mortgaging her business, depends on whether the continent’s biggest trade bank delivers on its promises.

The leadership transition will set the tone.

The ratings fight will shape the cost of the capital Afreximbank can mobilize.

And its push into payment systems and currency swaps could redraw how cross-border trade works in practice.

What comes next is about whether Africa’s self-built trade engine can stay strong enough (and nimble enough) to serve the people moving its goods every day.