Growth Model

Trends

Global trends, including globalisation, market deregulation, sustained economic growth and technology advance, have seen the expansion of exchanges and exchange trading in almost all geographies worldwide.

In Africa, despite a decade of unprecedented growth, improving levels of stability and governance, and the emergence of a middle class looking for new investment opportunities, the African exchange space remains largely untapped.

The Bourse Africa Response

Bourse Africa will fill this gap with an international-class spot and derivatives exchange aimed to serve both African and international users.

It will offer multi-asset class trading, initially focused on selected commodities before broadening its commodity portfolio and expanding into currencies and other asset classes.

Bourse Africa’s derivatives market will be situated in Botswana, offering trade in hard currency-denominated derivatives contracts to African and international users – initially through futures contracts, with the introduction of options once liquidity has been achieved in the futures markets.

Bourse Africa’s spot markets will be focused on a country-by-country basis, ultimately expanding continent-wide to cover all 53 African countries over time. Within each market, the initial offer will constitute a spot exchange, in addition to efficient linkages with the derivatives market in Botswana through a broker cluster to be known as a ‘quality service centre’.

And critically it is anticipated that over time, the Financial Technologies global network of exchanges and clearinghouses will increasingly be leveraged to channel liquidity from across major world financial markets into those offered by Bourse Africa.

Key growth drivers:

Development and introduction of new products, instruments and asset classes;
Geographical expansion across African markets;
Broadening market access to new categories of African and international market participants;
Leveraging membership of the FT Group of exchanges to increase membership and order flow;
Pursuit of strategic initiatives partnerships with exchange and ecosystem partners.

How does Bourse Africa fit into the existing landscape?

Complementing existing efforts

Outside South Africa, many of Africa’s commodity exchanges are small-scale and constrained in terms of cash and capability. Whilst these exchanges have done good work often in difficult circumstances, Bourse Africa can partner with them in its ‘spoke’ exchanges to bring in enhanced trading methodologies, technologies, expertise, capacity-building and management of the physical commodity. Bourse Africa also brings the pan-African overlay, providing the pipes and procedures to offer these exchanges a broader customer base that goes beyond Africa’s fragmented national boundaries.

Adding something new

Bourse Africa will be the world’s first combined commodity spot and derivatives platform. No commodity derivatives market or central counterparty clearinghouse currently serves any African economy outside South Africa. More than US$ 300 billion of African commodities have no ‘indigenous’ exchange on which to hedge or invest, or on which prices can be efficiently discovered. No existing entity offers an efficient, secure forum for procurement, delivery, risk management, or trading across borders in Africa. Thus, Bourse Africa becomes a critical instrument of African economic integration in line with the vision of the African Union (“AU”).