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From manufacturing to agriculture and services, more firms are entering regional markets, securing new customers and building cross-border partnerships. On the surface, this is a positive for African trade.
But beneath that growth lies a quiet problem. Many of these businesses, unfortunately, end up losing but not because they cannot sell.
They are losing because of how they get paid. And this is the part of the trade conversation that receives less attention.
Much of the focus is always on market access, logistics, tariffs, and frameworks such as the African Continental Free Trade Area (AfCFTA). These are important. But they are not where a significant share of value is being lost today.
The constraint increasingly sits in the financial layer of trade. For a Kenyan exporter, a transaction is not complete when goods are delivered.
It is complete when the value is received, converted, and settled. That process remains slow, fragmented, and, in many cases, expensive.
In practice, a business can lose between five and 10 per cent of the value of a transaction through foreign exchange spreads, intermediary fees, and settlement delays.
For a large corporation, this may be absorbed as a cost of doing business. For a Small and Medium Enterprise (SME), it can determine whether a transaction is profitable.
A Kenyan agribusiness exporting to West Africa, for example, may wait several days to receive payment, only to find that exchange losses and fees have materially reduced the value of the transaction.
This creates a distortion that is often underappreciated.
Businesses compete on the strength of their products and services, but lose margin on the movement of money.
This is a structural issue because a significant share of intra-African payments continues to rely on correspondent banking networks outside the continent.
Transactions between African markets are frequently routed through financial centres in Europe or the United States before reaching their destination.
Each additional layer introduces cost, time, and uncertainty.
From a business perspective, the implications can be unsettling. Pricing becomes harder to manage.
Cash flow becomes less predictable. Expansion decisions become more cautious.
Over time, companies begin to prioritise markets where payments are easier rather than where demand is strongest. Some avoid intra-African trade altogether. Others build in cost buffers that reduce their competitiveness.
This result is a disconnect from where we want to get as a continent. Africa is working to unlock trade through policy and market integration, yet the systems that support the movement of value have not kept pace. This is why the narrative needs to shift.
The question is no longer whether African businesses can access markets. It is whether they can retain the value of the trade they generate.
Business leaders have pointed to the hidden costs involved. Aliko Dangote has spoken about how inefficiencies in financial and regulatory systems continue to affect African enterprise, even at scale.
Institutions such as the African Export-Import Bank have also highlighted the scale of this challenge, noting that a large proportion of intra-African payments still depend on external clearing systems.
For Kenya, which is a regional hub, we are well-positioned to benefit from increased intra-African trade, but it will all depend not only on what is exported but also on how efficiently transactions are completed.
Greater attention, therefore, needs to be given to financial infrastructure, particularly the systems that support cross-border payments.
This includes improving settlement speed, enhancing transparency in pricing, and reducing reliance on external clearing networks.
Encouragingly, change is beginning to happen. New payment solutions are emerging that allow businesses to hold multiple currencies, settle locally, and manage foreign exchange more effectively.
However, adoption needs to scale.
If payment inefficiencies continue to be treated as a cost of doing business, value will continue to leak out of African trade.
Addressing them directly creates a different outcome, one where businesses compete on the strength of their products rather than the friction of their payments.
Kenyan exporters are already proving they can win in new markets.
Let’s help them retain the value they create, because without that, the gains from trade will remain incomplete.
The writer is the Sales Director for East Africa at Verto
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From manufacturing to agriculture and services, more firms are entering regional markets, securing new customers and building cross-border partnerships. On the surface, this is a positive for African trade.
But beneath that growth
lies a quiet problem. Many of these businesses, unfortunately, end up losing but not because they cannot sell.
They are losing because of how they get paid. And this is the part of the trade conversation that receives less attention.
Much of the focus is always on market access, logistics, tariffs, and frameworks such as the African Continental Free Trade Area (AfCFTA). These are important. But they are not where a significant share of value is being lost today.
The constraint increasingly sits in the financial layer of trade. For a Kenyan exporter, a transaction is not complete when goods are delivered.
It is complete when the value is received, converted, and settled. That process remains slow, fragmented, and, in many cases, expensive.
In practice, a business can lose between five and 10 per cent of the value of a transaction through foreign exchange spreads, intermediary fees, and settlement delays.
For a large corporation, this may be absorbed as a cost of doing business. For a Small and Medium Enterprise (SME), it can determine whether a transaction is profitable.
A Kenyan agribusiness exporting to West Africa, for example, may wait several days to receive payment, only to find that exchange losses and fees have materially reduced the value of the transaction.
This creates a distortion that is often underappreciated.
Businesses compete on the strength of their products and services, but lose margin on the movement of money.
This is a structural issue because a significant share of intra-African payments continues to rely on correspondent banking networks outside the continent.
Transactions between African markets are frequently routed
through financial centres
in Europe or the United States before reaching their destination.
Each additional layer introduces cost, time, and uncertainty.
From a business perspective, the implications can be unsettling. Pricing becomes harder to manage.
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Cash flow becomes less predictable. Expansion decisions become more cautious.
Over time, companies begin to prioritise markets where payments are easier rather than where demand is strongest. Some avoid intra-African trade altogether. Others build in cost buffers that reduce their competitiveness.
This result is a disconnect from where we want to get as a continent. Africa is working to unlock trade through policy and market integration, yet the systems that support the movement of value have not kept pace. This is why the narrative needs to shift.
The question is no longer whether African businesses can access markets. It is whether they can retain the value of the trade they generate.
Business leaders have pointed to the hidden costs involved. Aliko Dangote has spoken about how inefficiencies in financial and regulatory systems continue to affect African enterprise, even at scale.
Institutions such as the African Export-Import Bank have also highlighted the scale of this challenge, noting that a large proportion of intra-African payments still depend on external clearing systems.
For Kenya, which is a regional hub, we are well-positioned to benefit from increased intra-African trade, but it will all depend not only on what is exported but also on how efficiently transactions are completed.
Greater attention, therefore, needs to be given to financial infrastructure, particularly the systems that support cross-border payments.
This includes improving settlement speed, enhancing transparency in pricing, and reducing reliance on external clearing networks.
Encouragingly, change is beginning to happen. New payment solutions are emerging that allow businesses to hold multiple currencies, settle locally, and manage foreign exchange more effectively.
However, adoption needs to scale.
If payment inefficiencies continue to be treated as a cost of doing business, value will continue to leak out of African trade.
Addressing them directly creates a different outcome, one where businesses compete on the strength of their products rather than the friction of their payments.
Kenyan exporters are already proving they can win in new markets.
Let’s help them retain the value they create, because without that, the gains from trade will remain incomplete.
The writer is the Sales Director for East Africa at Verto
By Mark Mwaniki