The International Financial Services Centre (IFSC) made one of its major milestone achievements by facilitating the setting up of commodities exchange in the country. If the authorities issue the recently launched Multi Commodity Exchange (MCX) AFRICA Ltd an operating license, then a wave of revolution would start sweeping across Africa.
The Executive Director of MCX AFRICA, Chris Goromonzi, made their intentions known on Thursday: “Many of you may be wondering who MCX Africa is and what all the fuss is about. Let me start by saying our vision is very simple: to revolutionise the way that Africa trades commodities.”
The intention is to domicile the exchange in Gaborone and spread the service across Africa ÔÇô into all the 53 countries. Goromonzi said time has arrived for Africa to determine its own destiny, saying there is no reason why agriculture and resource prices should be determined outside the continent.
Through MCX Africa, he envisages a level playing field for African stakeholders in global commodity markets, saying they are bringing to the continent modern financial instruments only seen in other regions of the world.
For the first time in Africa, he said, there would be an efficient and cost-effective way of cross-border trading and clearing. This calls for a more integrated market in the continent.
He dismissed the readiness of the continent to host and manage a task of this magnitude in light of fragmented, inherent inefficiencies and under-development of the continent’s markets.
“Critics said the same about India four years ago. Today, MCX India trades over US$3 billion per day and is one of the world’s largest commodity exchanges,” he said.
He draws confidence from the fact that MCX Africa enjoys the support of Financial Technologies ÔÇô a company that helped set up MCX India.
Financial Technologies have also established three other successful exchanges in India – including for foreign exchange and for the perishables sector. They have established the Dubai Gold and Commodities Exchange, the Middle East’s first commodities and derivatives exchange in partnership with the Government of Dubai and the company is currently at an advanced stage of developing exchanges in Singapore and Mauritius.
“Besides drawing on the entrepreneurial
leadership of India’s youngest self-made billionaire, Jignesh Shah, MCX Africa has, at its disposal, the rich experience of the Financial Technologies Group and its portfolio of exchanges,” said Goromonzi. Drawing from the experience of India, Goromonzi noted that Botswana is poised for a windfall in terms of wealth generation stimuli, job creation, brokerage benefits, trading, banking, research, advisory roles, the media, technology, communications, warehousing and grading.
“We offer many opportunities for partnership and joint development in Botswana, in Africa and beyond. MCX Africa starts here in Botswana. We invite you to join us and accompany us on our travels as we extend a revolutionary idea across the Continent.”
The event was attended by, amongst others, Vice President Mompati Merafhe, Finance Minister Baledzi Gaolathe and a high powered delegation from the Financial Technologies Group and MCX Africa directors.