Africa Exchange Holdings last week introduced the East Africa Exchange (EAX), a platform that would link farmers to the regional market.
The EAX is a commodity exchange platform that aims to increase regional market efficiency and give the growing population, particularly smallholder farmers, better access to commercial markets. According to a statement by Dr Jendayi Frazer, the Africa Holding executive director, "The EAX has the capacity to facilitate cross-border trading of commodities within the EAC [East African Community], providing a central marketplace, connecting buyers and sellers throughout the region."
She added: "To be a true regional exchange, we are also opening up for regional investors so we can become East African owned."
The EAX is premised on the fact that the region is the fastest-growing bloc in Africa and this initiative would act to promote trade in the region. For long, EAC farmers have been exploited by the middlemen paying farmers peanuts and selling at a profit. Farmers here can be helped to jump that gulf. Organised farmers can also be helped access funding for their productivity.
Nicolas Berggruen, one of the founding members, said the EAX will link small-scale farmers in the East African Community to agricultural and financial markets so they can get competitive pricing for crops and access to finance. EAX will use NASDAQ's OMX X-Stream, a trading platform for electronic trading and warehouse receipts, so that farmers can deposit their produce into EAX certified warehouses, according to the statement from Africa holdings.