Rwanda’s Ambitious New Commodities Exchange: The EAX


In Davos this year, Paul Kagame, the President of Rwanda, took the opportunity to launch the East Africa Exchange (EAX). The EAX will be a commodities exchange which will be built and operated by NASDAQ OMX. The exchange will begin trading in the third quarter of this year and focus on agricultural commodities at its inception, with both spot transactions and futures available.

Rwanda has a strong system of governance and limited capital controls, making it an ideal location as a base for the EAX and inline with its goals of transforming the country into a financial hub for the region. The eventual goal of this initiative is to eventually have a pan-African commodities exchange. However, we see this as unlikely due to vastly different African economies and limited political will to pool cooperation for such an initiative. From our perspective, the more capital coming and going out of Rwanda, the better.

Rwanda has had a nascent stock exchange for three years now, with only two listings so far and limited liquidity. The market has strong governance and is relatively open to foreign investors. A commodities exchange should aid the stock exchange as the two are complementary.

Agriculture remains the single-most important sector in East Africa’s economy. If the exchange is successful in making itself accessible to farmers, then this could potentially be a huge boon for a region that is prone to severe drought, which has devastated entire regions in the past.

You will find a link below for an excellent case study by UNCTAD which looks at the impact that commodity exchanges had on Brazil, India, China, Malaysia, and South Africa. It is extremely extensive, but I would suggest you focus on part three which has some key insights from the study:

A broad range of development impacts – on farmers as well as other entities – emerge from the assessment of the five featured exchanges. Impact hypotheses were categorized according to six broad functions. Three of these can be considered as core functions: price discovery, price-risk management and a venue for investment. The other three can be  considered as wider functions, arising from the performance of the core functions: facilitation of cash commodity markets, facilitation of commodity finance, and broader industry  development (including capacity-building, market internationalization and use of ICT).  …  The study found  evidence to support 66 out of 76 positive impact hypotheses as occurring in one or more of the featured markets (see annex 4). Thirty of these were farmer related, and 36 related to the wider sector or economy. Moreover, impacts were generated across all six broad functions.

Dig deeper in the report: here.


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