AfDB Guidebook on Commodity Exchanges

by Developed Africa 13. February 2014 09:00

The AfDB published a "guidebook" on African Commodity Exchanges, and the reasoning behind creating a nation-wide exchange.

As long as the economic rationale is strong enough, an exchange that is ring-fenced in an effective manner can work even in difficult conditions."

For those unaware, a commodity exchange is where commodities (usually agricultural or raw goods) are traded, and by having them in Africa as they are know for: 

making economies more inclusive, boosting the links between agriculture and finance, and making the commodity sector more efficient and competitive."

The purpose of the document is to make people more aware of both the advantages and struggles of creating commodity exchanges in Africa, making it clear that a strong public-private partnership would be needed to be able to create the right environment for exchanges to succeed.

It is becoming more and more evident that to create effective sustainable development that financial and commodity markets are a necessity. Commodity markets help to reduce transaction costs, increase transparency, and increase reliability. By having commodity exchanges investors and financiers have more faith in the region, and are far less of a risk in those terms.

Click here to read the guide and learn more.

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