The Botswana International Financial Services Centre (IFSC) says it is currently coordinating with other stakeholders to facilitate the launch of the highly anticipated Commodities and Derivatives Exchange in the coming financial year.

The parastatal's CEO Alan Boshwaen says in the Botswana IFSC 2008 annual report released this week that together with the Ministry of Finance and Development Planning and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), they are preparing for the launch.

He says the pan-African exchange, which will be based in Gaborone, will employ 75 professionals to help develop the country's capital markets in the first phase.

The promoters of the exchange, Multi-Commodity Exchange of Africa (MCX Africa), early this year submitted an application for accreditation to the Botswana IFSC to trade a variety of major commodities.

Boshwaen says in the next financial year, the Botswana IFSC will persevere with business development to attract more investors to the country and assist them in setting up their operations.

A case in point, he said, is the upcoming MCX Africa initiative because it will require close coordination among the investor, the Botswana IFSC and Government.

"This is to ensure that the exchange has an appropriate legislative and regulatory platform in line with standards in jurisdictions where leading global mercantile exchanges already operate," Boshwaen says.

MCX Africa is expected to bring a myriad of benefits to Botswana and the African continent. It will also provide domestic and international investors with attractive new asset classes.

In addition, the exchange will spawn an ecosystem of ancillary service providers including targeted brokers, banks and other financial services institutions.

"Across the continent, MCX Africa will help buyers and sellers of African commodities achieve better price discovery," Boshwaen says. "This will lead to African producers realising greater value for their commodities."

With a hub and spoke model centered in Botswana, MCX Africa will also open subsidiary markets in five major commodities-producing markets in the continent with a view to expanding to over 50 countries in the near future.

The lead sponsor of MCX Africa is Financial Technologies India Limited (FTIL), which is a global leader in creating and operating techno-centric and next generation financial markets.

Financial markets promoted by FTIL are known to be transparent, efficient and liquid across multi-asset classes including equities, commodities, currencies and bonds.

FTIL owns MCX India, the Mumbai-based commodities exchange that has revolutionised commodities trading in the Indian subcontinent. After only four years of operation, MCX India is the world's 8th largest commodities exchange.