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The Dynamics of International Trade Finance in Africa

In: The Palgrave Handbook of International Trade and Development in Africa

Author

Listed:
  • Joshua Yindenaba Abor

    (University of Ghana Business School)

  • Isaac Kofi Bekoe
  • Mabouba Diagne

    (ECOWAS Bank for Investment and Development (EBID))

Abstract

International trade involves the movement or exchange of commodities—goods and services—across borders giving opportunities to consumers to gain access to goods and services that are either not available in their respective economies or more expensive to access. International trade activities have grown over the years and this development may be attributed to the globalization of the world’s economy as well as trade finance schemes to finance such trade. The chapter provides an overview of the trade finance dynamic in Africa, and the various payment methods in international trade, which include open accounts, prepayment, documentary collections, letters of credit, drafts, and counter-trade. The chapter also discusses trade finance instruments, including the line of credit, pre- and post-export financing, accounts receivable financing, as well as forfaiting and factoring. The chapter examines the agencies that facilitate international trade in Africa, which include the World Trade Organization (WTO), the Africa Continental Free Trade Area (AfCFTA), the African Export-Import Bank (Afreximbank), and the ECOWAS Bank for Investment and Development (EBID) among others. The chapter offers interesting insights on the financing schemes used in driving Africa’s export trade.

Suggested Citation

  • Joshua Yindenaba Abor & Isaac Kofi Bekoe & Mabouba Diagne, 2024. "The Dynamics of International Trade Finance in Africa," Springer Books, in: Matthew Kofi Ocran & Joshua Yindenaba Abor (ed.), The Palgrave Handbook of International Trade and Development in Africa, chapter 0, pages 135-158, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-65715-3_8
    DOI: 10.1007/978-3-031-65715-3_8
    as

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