Plans are underway to establish a regional Agricultural Commodity Exchange Centre as part of the implementation of the 2021-2031 strategy for the Alliance for Commodity Trade in East and Southern Africa (ACTESA).
The centre shall link small-scale farmers to national, regional and international markets within the Common Marker for Eastern Africa (COMESA) the East African Community (EAC and the Southern Africa Development Community (SADC) tripartite framework and later the African Continental Free Trade Area (AfCFTA).
According to the Chief Executive Officer of ACTESA, Dr John Mukuka, the centre will provide a platform for buyers and sellers to conduct business of their agricultural products through a team of brokers. Once established the commodity exchange will reduce transaction costs, by accommodating people active in the production, trade, processing and consumption of commodities.
Dr Mukuka said this during a meeting with the Alliance for a Green Revolution in Africa (AGRA) deputy president in charge of policy and state capability Apollos Nwafor, who was on a visit to COMESA recently.
He said the centre will be either physical or virtual and shall include future agricultural commodity markets exchange.
“A physical venue involves brokers meeting for trading sessions in a room or ‘exchange floor’, and trading by ‘open outcry’. A virtual venue is where brokers use remote computer terminals to trade through a central exchange facility to which they are linked electronically,” Dr Mukuka explained.
The commodity exchange is expected to improve agricultural productivity which the ACTESA Chief noted, has gone down and needed a boost by providing access to regional agricultural markets.
“This entails support and training to existing national commodity exchanges and strengthening their systems and improve their operations, then link them virtually or spot market where necessary. This shall be included in the working with AGRA in their new 2022-2027 strategy,” he added.
Other key areas of ACTESA interventions include support to seed companies using COMESA regional seed labels in seed trade, annual renewal of COMESA varieties on the COMESA Variety Catalogue and harmonisation of fertilizer policies/regulations, standards, quality assurance and market development in the COMESA Member States. Thereafter, a finance mechanism will be established for bulk manufacturing and procurement of fertilizers and distribution in the COMESA countries.
ACTESA is a specialized agency of COMESA, established in 2009 to facilitate the integration of and improved regional competitiveness of staple food markets across the region with the ultimate goal of achieving broad-based growth and decreased food insecurity.