“Africa’s Trade Potential: Tangible and Sustainable with the Right Financing”

Thierry Hebraud, Chief Executive Officer of MCB Ltd

As Africa emerges from a period of global uncertainty with renewed economic resilience, the Mauritius Commercial Bank (MCB) has released a comprehensive trade report outlining a strategic vision for sustainable growth across the continent. Drawing from the second edition of MCB’s Africa Trade Week, the report explores the challenges and opportunities shaping Africa’s trade landscape – from intra-continental trade integration and value chain development to sustainable agriculture, critical minerals, and the energy transition. 

MCB Group has officially released its latest in-depth Trade Report, entitled “Harnessing Africa’s Trade Potential: Strategies for Sustainable Growth,” offering a comprehensive outlook on the continent’s trade trajectory and the mechanisms needed to make growth inclusive, resilient, and sustainable.

Based on insights gathered during the second edition of MCB’s Africa Trade Week in 2024, the report addresses the future of African trade in the context of mounting geopolitical tensions, climate pressures, and the imperative for sustainability. Thierry Hebraud, Chief Executive Officer of MCB Ltd, sets the tone in his foreword: “Africa’s trade opportunities are tangible and, with the right trade finance solutions, also sustainable.”

Despite disruptions caused by the pandemic, global inflation, and geopolitical conflicts, Africa has shown remarkable resilience. Sub-Saharan Africa’s real GDP is expected to reach 4.2% in 2025, up from 3.6% in 2024. The rebound is supported by the easing of supply constraints and improved economic activity.

Yet, challenges abound. Currency depreciation, high debt repayments (USD 5.5 billion in Eurobond redemptions expected across eight countries), and an enduring trade finance gap estimated between USD 80-120 billion annually underscore the constraints that weigh on progress.

Trade remains a key engine for growth, with Africa’s goods and services exports growing from USD 343 billion in 2013 to USD 435 billion in 2023. However, commodity dependence persists, with 83% of African countries reliant on exports of minerals, metals, and energy.

The Intra-African Trade Imperative

A major theme of the report is the urgent need to boost intra-African trade, which remains at just 16% of total trade, significantly lagging behind intra-EU (70%) and intra-Asia (60%) levels. The African Continental Free Trade Area (AfCFTA) offers promise, with potential gains of up to 109% in intra-African trade value, and the ability to lift 50 million people out of extreme poverty.

However, realising this potential requires investment in logistics, harmonisation of trade policies, and the removal of non-tariff barriers. For instance, the cost of shipping a container from Mombasa to Kampala remains higher than shipping it from China to Mombasa.

Ten countries, including South Africa, Egypt, Nigeria and Côte d’Ivoire, dominate intra-African trade, accounting for 65% of the total. Regional economic communities like SADC, EAC, and WAEMU play vital roles in fostering trade integration, but disparities in infrastructure and policy implementation persist.

Diversification and Moving Up the Value Chain

The report highlights a crucial shift: Africa must transition from raw commodity exports to value-added products. For example, raw bauxite earns USD 65 per tonne, compared to USD 2,335 for processed aluminium. Currently, 97% of DRC’s cobalt exports go unprocessed to China.

Intra-African trade is more diversified than extra-continental trade, with 45% made up of manufactured goods. The growth of regional value chains in textiles, automotive parts, and agro-processing is promising. Rwanda’s exports to Kenya increased by 42% between 2020 and 2022, while Ghana-Nigeria trade grew by 20% in 2022.

Sustainable Trade: From Agriculture to Energy

Africa’s sustainability agenda is intricately tied to its trade future. With 65% of the world’s uncultivated arable land, and 40% of clean energy potential, Africa is poised to become a global green powerhouse.

Sustainable agriculture initiatives, like Apollo Agriculture’s climate-smart technologies in Kenya, are transforming smallholder farming. In Malawi, the Virtual Irrigation Academy’s tools help optimise water and fertiliser use. According to the FAO, sustainable agricultural practices could boost productivity by 30%.

On the energy front, the continent holds 30% of the world’s critical mineral reserves –cobalt, lithium, and manganese – key to the green transition. DR Congo alone holds over 70% of global cobalt reserves. The report projects that global revenues from key mineral extraction could reach USD 16 trillion over the next 25 years, with Sub-Saharan Africa potentially capturing over 10%.

A standout case is the Captain Arctic cruise ship, under construction by Chantier Naval de l’Océan Indien (CNOI) in Mauritius. Equipped with solar sails and powered by recycled wood pellets and biofuels, it is hailed as the world’s most sustainable vessel, and exemplifies Africa’s capacity in green manufacturing.

Mauritius: A Strategic Gateway for African Trade

Mauritius plays a pivotal role as a trade and financial hub through the Mauritius International Financial Centre (MIFC). With preferential access to 70% of the world’s population via agreements like AfCFTA, AGOA, CECPA, and the China FTA, Mauritius is ideally positioned to facilitate trade flows.

The MIFC provides tailored financial solutions that reduce currency and credit risks, optimise working capital cycles, and support value-chain integration. The report underscores its role in enabling investment flows and providing stability amid regional volatility.

Thierry Hebraud underscores this role: “MCB, being an African bank, aims to help African businesses in moving up the value chain and fostering sustainable growth.”

The Trade Finance Challenge and the Social Return

Addressing the trade finance gap is a recurring theme. The MCB Trade Week featured collaboration with the International Trade and Forfaiting Association (ITFA) to develop a Social Return on Investment (SROI) tool. This initiative, led by Dr. Rebecca Harding, seeks to evaluate the societal and environmental value of trade transactions by aligning them with the Sustainable Development Goals (SDGs).

The SROI tool will enable African businesses to demonstrate the broader impact of their activities, thereby attracting more favourable financing terms. The ITFA praised MCB’s commitment to promoting a fair and just transition by ensuring intra-African trade reflects its full value beyond economics.

Key Takeaways from MCB Africa Trade Week

1. Targeted Strategies: A “one-size-fits-all” approach does not work in Africa. Tailored trade and investment strategies, backed by research and economic diplomacy, are needed.
2. Social Impact of Trade: ESG integration, particularly the ‘S’ (Social), is crucial. Local production, energy efficiency, and community impact must be central to trade policy.
3. Mauritius IFC: Positioned as a vital financial gateway, Mauritius offers stability, regulatory strength, and a well-connected platform for African businesses.
4. Public-Private Partnerships: Mobilising private capital through risk-mitigation tools and capacity-building for local banks is essential to bridge the trade finance gap.

The report concludes with a strong call for collective, continent-wide efforts. By prioritising regional integration, sustainable practices, and inclusive financing mechanisms, Africa can shape a trade-led growth model that delivers prosperity across generations.

As Thierry Hebraud states, “by integrating sustainability into trade, Africa can set a precedent for responsible growth that balances economic, social, and environmental considerations.”