Thursday, October 5, 2023

Botswana expresses confidence in Bourse Africa’s commodities exchange

Botswana IFSC this week revealed it has confidence in the technological knowhow of Financial Technologies of India (FTIL)ÔÇöthe principal promoters of the muted pan-African commodities and derivatives exchange to be based in Gaborone.

Alan Boshwaen, CEO of IFSC, said significant progress has been made on the establishment of the derivative exchange with Bourse Africa having been granted a license by Non Bank Financial Institutions Regulatory Authority (NBFIRA).

“It is not that they are trying something new in Botswana, but they have been operating in other markets,” said an upbeat Boshwaen.

FTIL has been credited for being a top software leader in exchange and distribution technologies. It has presence in India, Dubai, Mauritius and Singapore to name a few.

“It is experienced in difficult countries and we are confident that it will navigate these telecommunication challenges,” Boshwaen told Sunday Standard.

Letsebe Sejoe, Senior Business Development Executive at IFSC added that the company that promotes Bourse Africa provides software systems, which is its core business.

Last year, FTIL clinched a deal to acquire 60 percent stake in Bourse Africa with the remainder to be held by held by financial institutions and strategic partners across Africa.

Early this year, an Indian consultant, Dr Shan Nair, was appointed by Bourse Africa to audit regulation in Botswana to pave way for the launch of the pan African commodities and derivative exchange.

Nair told Sunday Standard at the time that there are gaps in regulation and he had discussions with the Non Bank Financial Institutions Regulatory Authority (NBFIRA), IFSC and “we are to have discussions with the Bank of Botswana”.
He was expected to come up with regulatory framework that looks at factors like risk aspects and emulate the tougher regulation in India that managed to keep the country out of the global credit crunch.

Bourse Africa said the regulation will create a platform to trade in Africa and allow trade to happen between Africa and the international markets.

The planned Pan African commodities and derivatives exchange that has already opened an office in Gaborone will trade contracts for agricultural commodities, oil and metals across Africa with a hub and spoke model centered in Botswana.

The technology hub will be located in Botswana and link with other exchanges in the continent. Already, Bourse Africa has had talks with East African Green Council and COMESA that has written a letter of support.

Farmers across Africa will be taught about market information as first step, secondly, how to execute orders and risk management.

The initial investment in Botswana project will be US$ 100 million and it will have subsidiary markets in major commodities producing countries in Africa with intentions to expand to over 50 countries.

It is expected that the bourse will employ more than 75 professionals that will be split between Batswana and foreign professionals.

“We think it is a viable project,” said Boshwaen.

Financial Technologies of India is the principal promoter of Bourse Africa and it operates the Multi Commodities Exchanges of India (MCX India), Dubai Gold and Commodity Exchange (DGCX) and Global Board of Trade in Mauritius (GBOT).


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