Last Thursday, A new commodities exchange that launched in Kigali, Rwanda, with the aim of using state-of-the-art technology to provide East Africa’s small-scale farmers access to agricultural and financial markets.
The East African Exchange has been in operation for several months but 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.
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. Dr. 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.”
One of the key elements of the exchange’s strategy is to provide farmers with certified warehouses to store their products. With effective management of the “warehouses to ensure you maintain the quality and quantity of products that come in, you can increase the grade of the products, which can increase the returns for the farmers,” Dr. Frazer noted.
The presence of several of the region’s presidents at the launch of EAX is symptomatic of the importance the region’s leaders are placing on both development of agriculture and promoting cross-border trade, Dr. Frazer noted. “The presidents of Kenya, Rwanda and Uganda are essentially making the EAX one of the projects for fast-tracking regional economic integration,” she said.