From May 6 to 10, 2013, the African Development Bank is organizing a pan-African training workshop in Abidjan, Côte d'Ivoire, on derivatives and commodities markets for African regulators of derivatives and commodities exchanges.
The training workshop is a follow-up to the first pan-African conference for African regulators of commodities markets that was held in conjunction with Bourse Africa Limited last year in Gaborone, Botswana. The workshop will provide strategic and technical skills to assist African securities and capital markets authorities in developing legal and regulatory frameworks for derivatives and commodities exchanges to the prevailing international standards.
The workshop in Gaborone concluded with participants defining regulatory development and capacity building needs that governments, Central Banks and regulators will need to put in place to support innovation, development and integration of the derivatives and commodities markets in Africa.
This year, the training is expected to provide a background on the state of commodity exchanges in Africa, and an assessment of the policy, legal and regulatory environment in which they exist. It will also provide an analysis of what donors and multilateral development banks (MDBs) are doing, as well as the initiatives being pursued at national, regional and continental levels to develop derivative commodity exchanges.
In the wake of the global financial crisis, the international policy discourse recognizes that derivatives are critically important risk management instruments for commodity chains, companies, banks, financial institutions and investors. These instruments can enhance the liquidity, stability and robustness of financial systems, as long as they are structured and regulated in an appropriate manner. In that light, key pillars of global regulatory reform include trading derivative contracts through exchanges and to clear derivative obligations through central counterparty clearing houses (CCPs).
Outside South Africa, derivatives exchanges and CCPs do not yet exist in Africa. However, there has been growing realization that efficient financial and commodity markets are a prerequisite for equitable, inclusive and sustainable development. This has been manifested in key policy documents, including the African Union's Arusha Plan of Action and Declaration on African Commodities, 2005, as well as in the final communiqué from the COMESA-EAC-SADC Tripartite Summit of Heads of State and Government, 2008.