One promising proposition is to build a “trust economy” for Africa’s food systems built on efficient commodities exchanges that can de-risk the sector, unlock finance for major stakeholders in the food value chain and offer greater resilience for key players. Commodities exchanges in Africa should start with a first step of establishing ancillary infrastructure. Providing storage and logistics networks can enable smallholder farmers to gain access to credit, farm inputs, and a fair and efficient market system. As Nigeria’s first private-sector commodities exchange, AFEX has deployed a viable commodities exchange model for Africa by building and utilizing Nigeria’s largest supply chain infrastructure to provide efficient trade services alongside innovative products that unlock financing for over 260,000 farmers and other players in eight commodity value chains. Currently, Africa is growing faster than any continent in setting up commodities exchanges to facilitate diversification of asset classes, price discovery, and market transparency. Africa has about 14 commodities exchanges of which 13 trade agricultural contracts.
SOURCE: THE AFRICA REPORT