Earlier this year the famed ‘open-outcry’ futures trading pits of the Chicago Mercantile Exchange and the New York Mercantile Exchange met their demise when both exchanges finalized their long-anticipated transition to computerized trading. But nostalgic brokers can take solace in the fact that new commodities exchanges are popping up across Africa in rapid succession. In June of this year, the Ghana Commodity Exchange (GCX) was officially launched in hopes of positioning itself as a regional hub for commodity trading activities in west Africa, while also acting as a boon to exports. The GCX is expected to be fully operational by June 2016, and will offer spot trading of maize, soybeans, paddy rice, palm oil, and groundnuts.
Africa’s first commodities exchange, the Johannesburg Stock Exchange (JSE), opened its doors in 1988. Twenty years later the Ethiopia Commodity Exchange (ECX) launched, and its rather unexpected success has catalyzed a mad dash to introduce similar platforms in other countries. Rwanda followed in 2013 with the East Africa Exchange (EAX), which is now the continent’s third-largest agricultural bourse. Mozambique, Kenya, Uganda, Cameroon, and Tanzania now all have exchange concepts in various stages of planning.
The problem? Trading floors have become the latest vanity project for African governments – a great way to show off how their country is modernizing, but the only capital that most are attracting comes from foreign donors. It remains to be seen whether any of these newcomers will actually succeed in their intended mission – to bring greater efficiency into the fiendishly complex African food supply chain.
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