Benefits

Bourse Africa will deliver a range of benefits to participants in African commodity chains and investors both within and outside the continent:

Commodity chain participants

Price discovery
Transparency
Price and market information
Price risk management
Procurement/delivery solutions
A premium for higher quality production
Reduced counterparty risk
Improved financing opportunities
Enhancements to physical market practices
Investment in infrastructure
Regional and Pan-African integration
Education, training and capacity-building
Job creation

Investors

Spot and derivatives trading
Range of African commodities & asset classes
Robust risk management & market supervision
An effective regulatory structure
Portfolio diversification opportunities
First-of-their-kind contracts
Fully-electronic, state-of-art trading platform
Worldwide accessibility

What does Africa stand to gain?

Bourse Africa will deliver critical structural gains for entities throughout the African commodity and financial ecosystem:

Transparency: Pricing and market information that levels the playing field so African users have a platform to realise improved pricing for their commodities;
Price discovery: Bringing pricing closer to African commodity chains, ensuring prices reflect true demand-supply fundamentals and driving a more efficient allocation of capital in the economy;
Efficient physical trade: An integrated electronic platform for trading, delivery and procurement to stimulate low-cost, real-time, guaranteed transactions in a secure trading environment;
Rule-based trade and investment: Bringing significant reduction of asymmetries in market access, and virtual elimination of counterparty and systemic risk with the introduction of Africa’s first central counterparty clearinghouse (ex RSA);
Managing price risk: ‘Hedging’ in the notoriously volatile African commodity markets;
Improved financing opportunities: Supporting financiers and borrowers for the facilitation of small-scale lending as well as larger structured transactions;
Pan-African integration: Ensuring Africans can trade as efficiently with other Africans as they can with entities in the developed world;
Flagship financial centrepiece: Drawing in participation and investment from leading international institutions, stimulating the evolution of a sophisticated financial services industry, and putting in place critical components of capital market infrastructure;
Capacity building: The exchange, an open and inclusive institution, provides tools that can empower all entities in the commodity chain to better invest in and market their commodities, supported by extensive education and training programmes run by the exchange and its partners;
Significant job creation and infrastructure upgrade: As producer, processor, warehousing, grading, logistics, trading, banking, investment and brokerage operations respond to more efficient and structured markets.

Opportunities for international participants

Bourse Africa will provide significant opportunities for international market participants. These include:

Gateway to African opportunities: As the world’s pivotal supplier of many essential commodities, African growth and integration into the global market place makes Africa an irresistible new location for investment, including new first-of-their-kind contracts, accessible to trade from anywhere in the world;
The world’s first combined commodity spot and derivatives platform: Enabling more efficient alignment of spot and futures pricing, as well as enhanced performance of the integrated conduct of physical trade, price risk management, arbitrage and investment;
Efficient and secure trading environment: With robust risk management and market supervision systems, state of the art technology, central counterparty clearing and a sound regulatory framework, Bourse Africa provides an efficient and secure trading environment;
Portfolio diversification: Bourse Africa will offer trade in a range of new products with unique pricing dynamics and a range of volatility levels. In this way, Bourse Africa offers excellent opportunities for investors to generate more varied and tailored positions in the market and to diversify their investment portfolios;
Enhanced sales and procurement strategies: Increased transparency and the cross-border nature of Bourse Africa’s markets will catalyse efficiency gains for those active in the physical trade;
Lower basis risk: Because delivery points are in Africa, and because the markets will be easily accessible to African participants, basis risk will be low. Thus, Bourse Africa will become the optimum venue for hedging on African commodities.