Paul Kukubo, a Kenyan and former chief executive of ICT Board, is Rwanda-based EAX chief executive. Photo/FILE
By GEORGE NGIGI
In Summary
- Tuesday, the East Africa Exchange (EAX) concluded trade of 50 metric of tonnes of maize valued at Sh34,000 ($398) sold by a Ugandan to a Rwandese.
- EAX is owned by Nigeria’s Tony Elumelu’s Foundation, Heirs Holdings, Berggruen Holdings, 50 Ventures and Rwandan-led Ngali Holdings.
- Kenya has been seeking to boost its profile as the financial hub in the region a position that may be challenged by the younger but the ambitious and aggressive Rwandese market.
Rwanda has beaten Kenya in the race to establish
an East African commodities exchange with conclusion of the first
regional trade auction.
Tuesday, the East Africa Exchange (EAX) concluded
trade of 50 metric of tonnes of maize valued at Sh34,000 ($398) sold by a
Ugandan to a Rwandese.
Kenya’s dream of establishing a commodities
exchange is still stuck at the formulation of a legal framework for the
market, expected to boost farmer’s earnings by providing a ready market
for their goods.
“The auction took EAX one step closer to its
ambition to create “one African market” and has given further credence
to the importance of regional commodity trading,” said the company in a
statement.
EAX is owned by Nigeria’s Tony Elumelu’s
Foundation, Heirs Holdings, Berggruen Holdings, 50 Ventures and
Rwandan-led Ngali Holdings.
Paul Kukubo, a Kenyan and former chief executive of ICT Board, is EAX chief executive.
Talks on setting up a futures market have been ongoing in Nairobi since September 2010 when Futures Market Committee was set up.
The agricultural sector has been the main focus on
the need for a futures market due to the expected gains in helping
famers and consumers sail through the annual wild swings in commodity
prices. Draft rules to guide the market have been released to the market
for public debate.
The Capital Markets Authority is also processing
applications for licences to operate the derivative exchanges, which
includes the commodities market, from local and foreign firms.
In July, Nairobi Securities Exchange said that it
had started testing a new IT system for trading currencies and other
commodities in partnership with a South African firm, Securities Trading
and Technology.
Kenya has been seeking to boost its profile as the
financial hub in the region a position that may be challenged by the
younger but the ambitious and aggressive Rwandese market.
Rwanda has consistently ranked higher than Kenya in the Ease of Doing Business report prepared by the World Bank.
In the four months prior to this first auction
more than 50 traders from Rwanda and the East African region have
visited EAX offices for training on the electronic trading platform.
A commodities exchange is a marketplace offering
price transparency and wider market access to traders. Kenyan farmers
are currently exploited by brokers who buy from them at low prices to
sell it to the urban market with huge margins
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