Africa launches first commodities exchange
India-based Financial Technologies has established Bourse Africa (BAL), a pan-African commodities exchange.
The exchange platform will open in mid-2012 and will also function as a central counterparty clearinghouse and depository platform. The offering is part of a public-private partnership with the Financial Technologies Group and African institutions, including Afreximbank.
The commodities exchange will give Africa a voice in determining the price for goods exported from the continent, rather than relying on the dictates of exchanges in London or Chicago.
Chris Goromonzi, Bourse Africa’s managing director told GTR last year: “Why do we have to make London the reference point? What we need to do is to let the African commodities be traded when Africa is awake. Right now, what’s happening is that African commodities are being traded while we are sleeping. What we are saying is ‘let’s give Africa a voice’.”
Afreximbank’s executive vice-president of administration and banking services Denys Denya adds: “Transparent price discovery and competitive markets will invigorate Africa, helping us attain a better deal, whether for exports of raw or processed commodities or as an emerging force in global capital and money markets.”
BAL will also collaborate with Global Board of Trade (GBOT), a Mauritius-based multi-asset class exchange, to develop the domestic markets for African assets. The collaboration aims to enhance price discovery and transparency, price risk management, trade, financing and investment opportunities for participants across the world.
Africa has enjoyed sustained growth and development and has proved to be resilient to the global economic downturn. Therefore, it is only natural that participants will seek instruments and platforms to compete in the global financial markets on a level-playing field, BAL says in a statement.
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