One promising proposition is to build a ‘confidence economy’ for African food systems, based on efficient commodity exchanges that can reduce risks to the sector, unlock finance for key players in the food value chain and offer greater resilience to the main players. Trade in commodities in Africa should begin with a first step in setting up ancillary infrastructure. Providing storage and logistics networks can provide smallholder farmers with access to credit, agricultural inputs and a fair and efficient market system. As Nigeria’s premier private sector commodity exchange, AFEX has deployed a viable commodity exchange model for Africa by building and utilizing Nigeria’s largest supply chain infrastructure to deliver efficient business services as well as innovative products that unlock finance for more than 260,000 farmers and other stakeholders in eight valuable products. Chains. Currently, Africa is developing faster than any continent in setting up commodity exchanges to facilitate asset class diversification, price discovery and market transparency. Africa has around 14 commodity exchanges, 13 of which negotiate agricultural contracts.
SOURCE: THE AFRICA REPORT