WTO head urges closure of trade finance gaps

15 Jul 15

World Trade Organisation director general Roberto Azevêdo called on development partners to continue working together to close major trade finance gaps in Africa and Asia. 

Speaking yesterday at the UN’s third Financing for Development conference in Addis Ababa, he warned that financing gaps ran into trillions of dollars posed potentially catastrophic risks to growth and development.

Africa’s financing gap is estimated at between $110bn and $120bn, Azevêdo said. “By bridging this gap, we would unlock the trading potential of many thousands of individuals and small businesses across the continent. The smaller the business, the bigger the gains.”

In Asia, it is estimated that the value of unmet demand for trade finance is over $1trn, he added. suggesting the continent was deprived of leveraging trade’s full power as a source of development. 

Trade had a major role to play in the successful global effort to halve extreme poverty, but more needed to be done in the years to come, Azevêdo told the conference.

“A range of policy measures are needed to make sure that the poor feel the full benefits of trade.

“We have identified trade finance as a key issue here. Up to 80% of global trade is supported by some sort of financing or credit insurance.

“But developing countries are still suffering from the consequences of the 2008 crisis. The supply of credit has not yet returned to normal levels. And so we are seeing big financing gaps, particularly in Africa and Asia.

“We need to respond to this problem.”

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Otsubo7 International and Otsubo7. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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