EAC mulls regional commodity exchange market

ARUSHA-The East African Community and the Nicolas Berggruen Institute are in discussions to establish a regional commodity exchange market. A meeting held yesterday at the EAC Secretariat in Arusha, between the Secretary General Dr. Richard Sezibera and Nicolas Berggruen Institute Senior Advisor, Jendayi Frazer, set the stage for the EAC bloc’s move towards the realization of a regional commodities market. A regional commodity market can help solve the problem of thin markets by creating much needed mass and concentrating supply and demand in the East African Community. It’s believed that such an exchange could help address issues of price manipulation, often a problem in developing countries, increasing farmers’ incomes, and can also help in the development of other innovative financing tools for agriculture in particular and infrastructure in general. Sezibera welcomed the plan, noting that one of the key principles of the EAC as a private sector-driven and people-centred community is making sure the people of East Africa gain access to tools of wealth creation. The EAC Secretary General observed that one of the major challenges of the region is a population that is heavily dependent on agriculture – with over 80% of East Africans employed by the sector – yet the sector suffers various challenges ranging from low productivity, lack of infrastructure to get produce to markets, and limited value addition to what the region produces. Sezibera noted that some of these challenges are in part responsible for the region experiencing regular occurrences of supply surplus and hunger at the same time. “We don’t have a market for foodstuffs. The laws and regulations in the community should allow for the development of these markets. “A commodity exchange is one way to address these challenges,” he observed. Frazer expressed her organization’s delight at working with the EAC to establish a commodity market. She said the Nicolas Berggruen Institute was “very proud” and “looking forward” to collaborating with the EAC in this venture and added that she saw EAC as critical in terms of creating the scale to move the region’s economies forward. It is expected that the proposed regional commodity exchange will be actualized within the overall framework of a Public-Private Partnership arrangement. It will also ride on the framework of the EAC Food Security Action Plan and the EAC Climate Change Policy agreed to by EAC Heads of State at their last Summit held in April this year. Ends