Although the African continent is the second largest in the world after Asia, its agricultural produce has not been able to meet the needs of the populace. There are still famines in some parts of the continent. For this matter, it would seem logical that food production for Africa needs to be bumped up.
Ironically, this seems to have fallen on deaf ears. Instead, some governments in the continent are embarking on promoting stock and commodity exchanges. For example, Ethiopia has become the first country in East Africa to open a commodity exchange even if its people are still considered one of the poorest in the world.
With such a worrying statistic why would a country like Ethiopia focus on commodity exchange? This conflict between Africa’s need for agricultural development and promotion of commodity exchange needs further analysis.
This analysis needs firstly to define what commodity exchange is. Second, it should also consider the key conditions required for successful commodity exchange. One of the key conditions for a successful commodity exchange is the application of strict and standardized regulations.With the poor records in governance being witnessed in most African countries it needs to be seen how commodity exchanges can bring citizens out of poverty.