Africa’s economic prospects can be greatly improved through minerals processing, the expansion of manufacturing activities, and the production and export of nontraditional agricultural and industrial products. The United Nations Economic Commission for Africa (UNECA) (2010) notes that economic diversification in Africa can deliver the improved utilisation of the continent’s vast agricultural and mineral resources and the further development of services sectors such as tourism. To capitalise on these opportunities, however, African countries must become integrated into the world economy and develop stronger and more sophisticated export sectors in order to maintain and achieve sustained growth.

The development of commodity exchanges as a means of expanding market space for trading commodities is regarded as one way of addressing some of the challenges to expanding intraregional trade. This is mainly because in the subregion, exports are predominantly primary and unprocessed goods consisting of oil, minerals and agricultural goods. Thus, reliance on exports of such commodities by countries in the subregion provides an opportunity for the development of commodity markets with the aim of triggering massive improvements in infrastructure and financing arrangements of commodity value chains and competitiveness for international trade.

The objective of this paper is to explore the existing agricultural commodity exchange platforms in eastern and southern Africa and the manner in which they function. We also highlight the challenges associated with these platforms and identify areas that can be improved in order for the platforms to function effectively. In sections to follow we look at how a commodity exchange market operates. This is then followed by profiling the main commodity exchange platforms operating in eastern and southern Africa, with the aim of highlighting their strengths and weaknesses. A look at how commodity exchange markets promote both intraregional trade as well as the development of regional value chains follow thereafter. The paper concludes by proposing and exploring the idea of a regional commodities exchange.

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