East Africa Exchange Launched
Davos, Switzerland, January 24, 2013 – The East Africa Exchange was introduced to the international community at the World Economic Forum in Davos, Switzerland. President Paul Kagame of Rwanda, Nicolas Berggruen of Berggruen Holdings and Jendayi Frazer of 50 Ventures also representing Heirs Holdings, presented the project at a press conference yesterday, January 23 at 4:30pm (GMT +1).
EAX Rwanda is the first part of a regional exchange intended to increase transparency in the region’s commodity markets. Through private-sector-led investment and under the terms of an agreement signed with the Government of Rwanda, the East Africa Exchange aims to increase regional market efficiency and liquidity as well as giving the region’s population of 130 million, especially smallholder farmers, better access to markets. The exchange will initially focus on establishing an auction facility and spot trading for agriculture and non-agriculture commodities, but will also develop futures trading across East Africa. Its investors are Berggruen Holdings, Heirs Holdings, a pan-African investment company, The Tony Elumelu Foundation, 50 Ventures and Rwandan led Ngali Holdings.
EAX will complement the East Africa Community’s (EAC) goal of regional economic integration as set out by the Common Market Protocol, increasing liquidity and sustainability of regional financial and commodity markets, supporting the EAC’s competitiveness globally. EAX will also uplift national and regional economies by reducing market barriers to trading, providing a transparent regional economy through a secure mechanism that facilitates financing to farmers and traders.
EAX will be powered by NASDAQ OMX’s X-stream Trading and Clearing platforms. “This is a significant honor for us to be chosen to help launch a new exchange in Africa,” said Lars Ottersgård, Senior Vice President and Head of Market Technology. “As the East Africa Exchange grows and expands its vision for greater market efficiency, liquidity and transparency, we are dedicated to supporting its efforts through our proven trading and clearing technology.”
Nicolas Berggruen, the founder and president of Berggruen Holdings, said, “A transparent, modern exchange will make such investment much more likely. Agriculture is key to Africa’s prosperity, and so aiding the flow of information and finance within the agricultural sector will be especially helpful.”
The chairman of Heirs Holdings, Tony O. Elumelu, C.O.N., said, “The East Africa Exchange showcases our desire to embrace global opportunities and practices, while ensuring that much of the value adding aspects of Africa’s resource wealth stays on our continent.”
Jendayi Frazer, who headed the U.S. Department of State’s Bureau of African Affairs and was Senior Director of African Affairs at the U.S. National Security Council, is president of 50 Ventures. She said: “The East Africa Exchange brings together African expertise, African and global financing, and world-class technology to advance the integration and competitiveness of the East Africa Community’s market.”
Speaking on behalf of the Government of Rwanda, Hon. John Rwangombwa, the Minister of Finance and Economic Planning said: “The East Africa Exchange fits well within our vision to transform the lives of all Rwandans. This partnership is a welcomed opportunity to strengthen the linkages between producers and the market and increase access to information vital for price discovery. We look forward to working with the investors of the East Africa Exchange to increase the income of producers and improve their lives.”
Berggruen Holdings, Heirs Holdings, The Tony Elumelu Foundation and 50 Ventures have also partnered to form Africa Exchange Holdings, Ltd (AFEX), which seeks to develop a network of commodity exchanges in Africa, starting in Rwanda, to transform trade dynamics and ensure higher incomes for the rural poor.