Editorial: A Pan-African stock market in the offing


Fourteen (14) African commodity exchanges have agreed to harness their collective potential under the African Continental Free Trade Area (AfCFTA), in what market watchers describe as one of AfCFTA’s biggest feats so far.

Known as the AfCFTA Association of Commodities Exchanges (ACX), its major aim is to work collectively in making the continent food secure and promote market efficiency through sharing knowledge and best practices.

ACX will encourage the adoption of modern trading practices including electronic trading platforms and standardised contracts, as well as enhance market information across the continent; thereby enhancing market efficiency, reducing transaction costs and attracting greater participation from both domestic and international traders.

The ACX initiative, spearheaded by the Ghana Commodity Exchange (GCX), will most importantly facilitate cross-border trade. Under this, ACX hopes to work closely with AfCFTA on harmonising trade regulations, simplifying Customs procedures and expediting cross-border transactions.

Apart from South Africa, which has a well-developed commodity exchange, other exchanges on the continent are at a nascent stage.

Chief Executive Officer of GCX, Tucci Ivowi, declared that there is no better time for African commodity exchanges to contribute in the realisation of a common African market than now.

Mrs. Ivowi said the African Commodities Exchanges’ overarching goal is to help build capacity and leverage synergies, opening up endless opportunities for cross-border commodity trading within the free trade area.

Challenges faced by GCX and the continent’s other exchanges mainly hinge on inadequate liquidity being the dominant concern.

A Pan-African stock market, also known as a regional stock market, is a financial market that spans multiple countries in Africa and allows for the buying and selling of securities, such as stocks and bonds, among investors across the continent.

AfCFTA establishes a single market for made-in-Africa goods and services, eliminates 90 percent of tariffs and tackles non-tariff barriers such as Customs delays. Currently, intra-African exports stand at about 17% of total continental exports. Increasing this share is expected to increase value addition, help create jobs and boost incomes.

The African Union’s adoption of the Year 2023 theme – ‘Year of AfCFTA: Acceleration of the African Continental Free Trade Area Implementation’ – is expected to generate greater political commitment and accelerate effective implementation of the AfCFTA, to fully benefit the African citizenry and achieve Agenda 2063’s aspirations and goals.

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