Bourse Africa, a unit of Financial Technologies, plans to set up an electronic exchange to trade African commodities futures by the second half of next year, Director of Strategy Adam Gross said.

The Gaborone-based company is in talks with regulators in Botswana, Kenya, Tanzania, Uganda, Nigeria, Ghana, Ivory Coast, South Africa and Zambia for approval to incorporate them into an Africa-wide trading forum, Gross said today in an interview in the Kenyan capital, Nairobi.

Trading through the exchange will help small farmers get better prices for their crops by helping to establish regional benchmark prices, Gross said. At the same time, buyers and sellers may benefit from gaining access to a larger number of contracts than local commodity exchanges in countries such as Zambia and Ethiopia, he said.

“Now Africa is looking to Europe or America for pricing, but for most African producers, factors like the quality or freight, insurance, and export costs can be very different,” Gross said.

The market will initially trade in cocoa, cotton, corn, crude oil and gold futures contracts and later expand to coffee, tea, wheat and sugar, as well as starting spot trading, he said. Bourse Africa will provide most of the $100 million initial investment required to create the exchange platform and to bring in technical expertise, he said.

In September, Kenya announced similar plans to operate a commodities exchange by year-end.

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Bourse Africa | Financial Technologies

Source(s): Bloomberg News