African countries and small and medium-sized enterprises (SMEs) are suffering the most from a deepening global trade finance gap, according to a new survey by the International Chamber of Commerce (ICC).

The ICC 2016 Global Survey on Trade Finance shows that 66% of businesses find access to finance a significant obstacle to trade in Africa. 

While intra-African trade has shown signs of significant growth - accounting for nearly 18% of the region’s total trade in 2014, an upward trend from 10% in 2010 - intra-African investment accounts for only 12% of the total value of investment in Africa, in comparison to 33% in Asia.

Vincent O’Brien, a member of the ICC Banking Commission Executive Committee, said: “Africa has a trade finance shortage estimated at between $110bn to $120bn - a range far higher than the previous estimate of $25bn.”

“In particular, the unprecedented fall in commodity values has created liquidity gaps for many banks across the region. Initiatives that facilitate internal and external trade should be fully encouraged, while Africa also needs to attract much-needed financing to support trade and meet the significant trade finance deficits,” he said. 

The Global Survey also shows that SMEs face 58% of total rejections - despite submitting 44% of all trade finance proposals, in contrast to 40% submitted by large corporates (33% of rejections) and 16% by multinational corporations (9% of rejections). 

Overall, the ICC 2016 Global Survey on Trade Finance shows that 61% of respondents - national, regional and global banks with trade finance functions - reported a global shortage of trade finance.

Only 52% reported an increase in trade finance activity, compared to 63% in 2015 and 80% in 2012. 

According to this year’s Global Survey - which received 357 responses from 109 countries worldwide - 61% of respondents reported a global shortage of trade finance.

Only 52% of respondents reported an increase in trade finance activity, compared to 63% in 2015 and 80% in 2012.

Furthermore, the perceived shortfall came predominantly from regional and global banks - 78% and 56% respectively, compared to 41% of national banks. 

John Danilovich, ICC Secretary General, said: “We must emphasise the importance of trade finance. It is often forgotten - trade finance has dropped off the international agenda. We need to do more to communicate its central importance to the global economy.”