An audience of nearly 400 gathered for the first ever Convening on Commodity Exchanges in Africa, with an opening call to engage with passion and creativity, in honest dialogue and reflection on the future of our continent’s agricultural markets and Africa’s rightful place in the emerging new global commodity order where the push for better coordinated, more transparent, and better regulated markets will shape the next few years.  With an early principle that, all protocols observed, this was a coming together of minds and spirits rather than yet another conference, workshop, or summit, the Convening engaged with open dialogue format rather than formal presentations, with superb moderators, including top African journalist Komla Dumor of BBC World News, Tumi Makgabo formerly CNN, and Belinda Obura of Citizen TV Kenya among others, to keep the discussion sharp and on focus, timely, sometimes combative,  and leaving no stone unturned.

From near and far.   Participants to the Convening hailed from government, commodity trading,  exchanges, regulators, technology solution providers, bankers, farmers’ groups, development agencies, and many more.  No less than 17 African countries were represented as well as Europe, the US, and India.   Among these were CEOs of commodity exchanges from Zambia, Nigeria, Uganda, Malawi, South Africa, and host Ethiopia, in addition to representatives of MCX India, CME Group (Chicago), JP Morgan and Morgan Stanley.  Exchange projects under formation were represented from Rwanda, Ghana, Kenya, Mozambique, Tanzania, Zimbabwe, Cote d’Ivoire, Sudan, Botswana, Mali, and Senegal.  Directors of securities regulatory commissions were in attendance from Zimbabwe, Ghana, Kenya, Tanzania, as well as the United States SEC.   Major African banks present included EcoBank Transnational, Africa Ex-Im Bank, Equity Bank (Kenya), and Standard Chartered, along with technology giant Google Africa and other solutions providers.  Farmers’ organizations were represented from Zimbabwe, Malawi, and Kenya  along with the Farmers Resources Bank in the US.  Finally, development partners and intergovernmental bodies included the UN Economic Commission for Africa, the African Development Bank, the African Union Commission, the Common Fund for Commodities (Amsterdam), the World Food Programme, the World Bank, Agence Française de Developpement, USAID, Irish Aid, and UNDP, among others.

Opening our Hearts and Minds.    The Opening Ceremony set the tone with a dramatic flag ceremony celebrating African nations accompanied by a ponderous jazz rendition of what can be considered Africa’s anthem “Harambee, Harambee”  arranged by Ethiopia’s leading young composer, Girum Mezmur, followed by a lively and engaging contemporary dance piece title “Africa Markets Live!” showing the complexity, humanity, as well as the changing roles and what is termed the orderly chaos of markets, performed by Adugna Dance Group and especially choreographed by Junaid Jemal, recent winner of the prestigious Rolex Arts Award.   Later in the program, the film short “Markets and Life!” emphasized the real life linkages between producers, consumers, processors, and traders and how the market weaves all together.   Other entertainment highlights included the version of “Malaika” rendered by Ethiopia’s leading diva, Tsedania, winner of 2004 Kora Award for Best East African female artist, an acoustic Ethiopian jazz performance reviving tunes from Ethiopia’s musical renaissance in the 1950s and 1960s performed at the Jubilee Palace Gala Dinner in the presence of H.E. President Girma Woldegiorgis, and ending on a sweet note on the second morning with the engaging duo Munit and Jorg, who treated the crowd to an original folk song titled “Trans-African Highway” reminding us why we were gathered, as they sung to the aspirations of an Africa reunited, linked from West to East and North to South, without visas and restrictions, and truly free.

Powerful Ideas at Work.   Against this backdrop, important and far-reaching themes were tackled in the plenary sessions that spanned the full range of perspectives on the topic of commodity exchanges in Africa.  The Opening Keynote Panel set the stage with top policymakers including the Deputy Prime Minister of Ethiopia reflecting on the need to evolve Africa’s role in the global economy and regain its market share as rising economies increase food demand and price volatility ensues.  The Panel confronted the inertia over the past twenty years of African institutions such as the African Union to lead the agenda forward toward action to establish commodity exchanges, the need for focus on production and productivity gains on farm, and the complementarity of roles between private and public sector as we move forward to better organized domestic and regional markets.  Following this, the first Plenary Session actively debated whether there was an “African way” for commodity exchanges and whether national exchanges were viable at all, and the need to consider regional and pan-African exchanges as the end target, but perhaps not the starting point.  The debate focalized used the analogy of the difference between creating a single regional airline (a difficult path) versus the more achievable “code-sharing” among national exchanges to leverage on common interests.  Ultimately, the focus must remain on adding value to the market and to the societies at hand, and to be uncompromising in this principle at any level.  This was followed by an engaged discussion between government representatives addressing how the public sector should create an enabling environment for private trading by creating the conditions for efficient, reliable, and transparent markets, without crowding the private sector out, and be mindful of filling the gaps rather than supplanting private initiatives.  The principle that the state must actively lead but be willing to engage in Public-Private Partnership and to step aside over time was emphasized.  

A brilliantly delivered Lunch Keynote Address brought out the universality of efforts throughout the history of mankind to create functioning markets and the universality of mistrust of the middleman, with a perspective on the founding of markets and regulators in the early era of the world’s organized markets in the United States and Europe more than a century ago.  A caution was made for regulators to follow rather than inhibit markets and for markets to remain true to their foundational principles, to serve their societies, equally valid in rural Africa as it is in the evolving global market.   The Regulators’ Round that followed then picked up on these themes and carried the discussion forward on the need for independent regulators and for the active engagement of regulators in securities markets to extend their focus nd build their capacities to promote the establishment of commodities trading.

Following this, international market experts tackled the controversial subject of price volatility attempting to debunk myths on whether commodity exchanges are the cause or the solution.  While the debate did not go as far as clearly identifying exchanges as the solution, consensus did emerge that the increased volatility worldwide was due to the shrinking of supply relative to increasing demand rather than increased speculation on exchanges, with the point made that volatility caused speculation and not the other way around.  Thus, the debate evolved to suggest that current trends in global thinking such as the recent G20 push to tighten market regulation and reduce market position limits would not lead to the desired outcomes. Rather, the focus should be on increasing supply through efforts to grow more food, where Africa could play a major role.

The final session of the first day challenged the traditional conservatism of the  banking sector, suggesting that Africa’s banks were significantly behind in promoting the establishment of and engaging with commodity exchanges which would ultimately serve their own interests by reducing lending risk and opening major new opportunities in warehouse receipt financing, and overall greater financial flows in the economy.  While it was argued that banks have been active in lending to the export commodity sector, a new engagement with banks directly taking stake in commodity exchanges was put as the way forward, and banks were encouraged by the audience to deliver on their stated commitment to be aggressive in this regard.

The second day opened with three well-attended Parallel Sessions on key challenges:  Transparency , Capacity, and Regulatory,  with a wide range of perspectives and lively debate by the participants.     The first plenary session of the morning focused on the perspectives of farmers and farming communities, with a strong position taken that more efforts needed to be made to empower the participation and access of farmers to the institution of commodity exchanges.  Emphasis was given to the need for farmers to be major stakeholders if not owners and active players in the conception and operation of commodity exchanges if they were to realize the benefits.  In addition, efforts by major grain buyer WFP to reach farmers need to be strengthened and refined.

The following plenary session turned attention to the role of technology and how technology must be an active player, like banks, because commodity exchanges are about information and thus core to the business of information technology.  Conversely, commodity exchanges must rely on and even drive the power of innovation from the technology sector.  It was noted that such innovation would come about through a focus on the business and the needs of people in markets, and not on the technology itself, and that, moreover, technology solutions needs to be adaptive and reactive in order to flexibly respond and meet needs.  Thus, weak infrastructure while a potential constraint, was in fact an opportunity to innovate and find creative solutions, the secret behind the recent advances in mobile banking and other innovative solutions.


The Time is Now.   The Convening closed on a high note, bringing back perspectives and emphasizing concrete commitments from exchanges, banks, government actors, and development partners.  Government representatives who came with questions leave with a better understanding on concrete strategic issues.  Banks that were not fully committed due to lack of exposure leave with a better understanding.  Technology providers that may not have seen the opportunities now should engage actively.  Ultimately, the vision of an Africa with active and vibrant modern markets advancing Africa’s transformation was emphasized, with a beacon call to the following major themes:  
  to stay true to adding value to one’s market
 while regional and pan-African exchanges are the logical and critical targets, to take first steps at the national level rather than becoming paralyzed by too lofty ambitions
   to put in place more exchanges in the coming year, with a commitment by Rwanda that its soon-to-be exchange may well host the next Convening
 to have banks seriously engaged and committed to warehouse receipt financing and stake holding in exchanges to expand their reach to rural users
   to have major technology entities such as Google be directly engaged as stakeholders in exchanges
 to engage farmer organizations as major players and stakeholders in exchanges
 to include storage, transport, and logistics services providers in the continuing dialogue and engagement in the years to come.  
.
The resounding message was heard and repeated that the time is now, that there is no better time for Africa to organize its domestic markets, to bridge across its borders and link its markets, and to take back the control over the price discovery of its own commodities.  This initiative will have to be cognizant that changing the rules of the game will bring resistance from within and outside but that there are no longer any excuses and no time to waste.

Not everything can be planned, not everything can be scripted.  As the Convening closed amidst recognition of all who had made it possible from Speakers, to Moderators, to Organizers and Participants, the excitement of the ideas that had been shared, the vision that had been opened up, the excellence that had been glimpsed, led to a palpable difference in the air, a particular energy as goodbyes were made between new contacts, or what we can consider our own bit of magic..

Outcomes Beyond.    As the tours and visits continued after the Convening, some concrete outcomes have already emerged and will yet evolve.  In the afternoon following the Closing, the Government of Mozambique and ECX signed a Memorandum of Understanding committing to a rapid project deployment to establish the Mozambique Commodity Exchange by 2013.  This follows on the Memorandum of Understanding signed by the Government of Rwanda and the ECX in June 2011 to a similar project.  So the desired links between Africa’s exchanges has started and we are embarking on an exciting journey to establish that Trans-African Highway we all wish to see.

On November 10, following the Closing, the ECX Institute hosted a two-day training on the Basics of Commodity Exchanges,  free of charge, for 17 participants from 5 countries who had attended the Convening, from Tanzania, Rwanda, Sudan, Nigeria and Ghana, with a follow-on proposal for in-country training to be provided in Nigeria in the coming months.  

On another front, the Convening website www.commodityexchangesafrica.com where all sessions and performances have been uploaded is generating a lot of interest and visits from around the world, along with media follow up on the major themes raised.  Look out for Komla Dumor’s upcoming piece in the Kenya Airways in-flight magazine as well as further reports on BBC, VoA, and elsewhere.

.…So, in sum, may the magic continue as those who attended carry the message home, as those who could not attend get engaged in other ways, as our media partners carry the message far and wide, as the commitments expressed in Addis Ababa become realities on the ground across the continent, as we move forward with actions that will transform lives of millions.

And finally, echoing the President of Ethiopia, may God bless Africa.