A new commodities exchange that launched late last week in Kigali, Rwanda, aims to use state-of-the-art technology to provide East Africa’s small-scale farmers access to agricultural and financial markets.
The East African Exchange’s backers hope the system will enable farmers to achieve competitive pricing for their crops, as well as getting access to financial services that will help them better manage their businesses.
The exchange has been in operation for several months, but it was launched officially at a ceremony last Thursday in Kigali, Rwanda, attended by Presidents Paul Kagame of Rwanda, Uhuru Kenyatta of Kenya, Salva Kiir of South Sudan and Yoweri Museveni of Uganda.
In an interview with WSJ Frontiers, Jendayi Frazer, the chairman of the East African Exchange (EAX) and a former U.S. Ambassador to South Africa, explained that one of the primary benefits of the exchange would be that it provides more transparency for farmers in the region. “Farmers will have clear view of what prices are,” she said. With an accurate, real-time knowledge of the selling prices of their crops, farmers will be better able to choose when to put their products on the market.
The exchange should also encourage intra-regional cross-border trade, development of which is seen by many analysts a key driver of Africa’s economic development. Frazer added: “The EAX has the capacity to facilitate cross border trading of commodities within the [East African Community], providing a central marketplace, connecting buyers and sellers throughout the region.”
One of the exchange’s co-backers, Tony Elumelu, chairman of Nigeria-based pan-African investment group Heirs Holdings, expressed the exchange’s mission in grander terms: “If we want to forever consign to the archives of history the images of donor aircraft landing in Africa to save our starving, huddled fellow Africans,[we must] grow more food, increase access to markets and get better and more stable prices for our farmers.”
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