14 commodity exchanges across the African continent have united their efforts under the African Continental Free Trade Area (AfCFTA), marking a significant milestone for the AfCFTA initiative.

The newly-formed AfCFTA Association of Commodities Exchanges (ACX) aims to collaborate on ensuring food security and enhancing market efficiency through knowledge sharing and best practices.

They intend to promote modern trading methods, electronic trading platforms, standardized contracts, and improved market information to reduce transaction costs and attract greater participation from domestic and international traders.

Additionally, the ACX seeks to engage with relevant stakeholders, including government agencies and industry experts, to raise awareness about the role of commodity exchanges in price discovery, risk mitigation, and market access.

This advocacy is vital for driving policy reforms that facilitate the growth of efficient and transparent commodity trading platforms across the region.

Notably, the formalized commodity trading space in most AfCFTA markets is still in its early stages, with South Africa being an exception.

The initiative is led by the Ghana Commodity Exchange (GCX) and focuses on facilitating cross-border trade. ACX plans to collaborate with AfCFTA to harmonize trade regulations, simplify customs procedures, and expedite cross-border transactions.

During the "Maiden Forum: AfCFTA Association of Commodities Exchanges" event in Accra, the CEO of GCX, Tucci Ivowi, emphasized the importance of African commodity exchanges working together to contribute to the realization of a unified African market.

The goal is to ensure food security across the region and provide essential commodities to meet the continent's needs.

The ACX operates under the AfCFTA's Guided Trade Initiative, which aims to match countries and products. By pooling resources and expertise, the African Commodity Exchanges intend to open up opportunities for cross-border commodity trading within the free trade area.

While each country has its unique characteristics and commodities, the possibility of a common African commodity exchange is considered, especially because these exchanges operate electronic platforms that can be interlinked, allowing for easy trade among themselves.

One of the common challenges faced by commodity exchanges across Africa is liquidity constraints. Building liquidity is a crucial aspect of commodity exchange development, and overcoming this challenge will require time, large buyers and sellers, policy initiatives, and collaboration with financial institutions.

South Africa is the exception with a well-established commodity exchange, while the rest of the exchanges on the continent are in nascent stages. However, the ACX's collaborative efforts aim to accelerate progress and contribute to regional economic growth.