EAC regional commodity exchange market planned

The East African Community (EAC) and the Nicolas Berggruen Institute plan to come up with a regional commodity exchange market to reduce costs of transactions and enhance information flows and improve returns to market agents.

EAC secretary general Dr Richard Sezibera and Nicolas Berggruen Institute senior advisor Jendayi Frazer said during the weekend the regional commodity market could help address issues of price manipulation, increase farmers’ incomes and develop innovative financing for agriculture and infrastructure.

Dr Sezibera welcomed the plan to establish the commodity exchange market to ensure the people of East Africa accessed tools of wealth creation.

He also observed that one of the biggest challenges facing the region was a population that was heavily dependent on agriculture – with over 80 per cent of East Africans employed by the sector – yet the sector suffered from multiple challenges ranging from low productivity, lack of infrastructure to get yields to markets and limited value addition to what the region produced.

“We don’t have a market for food crops. The laws and regulations in the EAC should allow development of these markets. A commodity exchange market is one way of addressing these challenges,” he noted.

For her part, Frazer said her organisation is delighted in working with the EAC to establish a commodity market.

She said Nicolas Berggruen Institute was “very proud” and “looked forward” to collaborating with the EAC in this venture and was hopeful that it would move the region’s economies forward.

It is expected that the proposed regional commodity exchange market will be actualised within the overall framework of a public-private partnership arrangement. It will also ride on the framework of the EAC food security action plan and the EAC climate change policy agreed to by EAC Heads of State at their last summit held in April this year.

Nicolas Berggruen Institute (NBI) is an independent, non-partisan think-tank and consultancy institute engaged in comparative studies, design of systems of governance suited to the new and complex challenges of the 21st century.

A commodity exchange is a regulated market in which multiple buyers and sellers trade commodity-linked contracts (goods) with a pre-approved set of market agents and commonly agreed trade procedures.
SOURCE: THE GUARDIAN