An African commodity exchange could be the key to unlocking what the African Continental Free Trade Area (AfCFTA) has promised but not yet delivered.
Such a platform would bring buyers and sellers together. It would enable transparent pricing, cut transaction risks, and help African nations capture greater value from their resources.
President Tinubu made his position clear at the Africa CEO Forum in Kigali recently. He called an African commodity exchange "non-negotiable" for the continent's producers and traders.
His argument centres on one critical point: Africa must stop routing transactions through external currencies and markets. The dollar dependency introduces costs and volatility that the continent "can no longer afford," he said.
AfCFTA has already created a unified legal and tariff framework across 54 countries. Intra-African trade reached $220.3 billion in 2024, according to Afreximbank data, but this represents only 15-18 percent of continental commerce.
An exchange could change that calculus significantly. It would enable trades in local currencies and allow African nations to set their own commodity prices.
Ayodeji Balogun, group chief executive of AFEX Commodities Exchange, believes this is essential. "An exchange is the only way commodities can be traded effectively across many countries," he told reporters.
AfCFTA already possesses part of the solution. The Pan-African Payment and Settlement System (PAPSS) exists as a complementary platform for settling transactions.
According to Balogun, the division of labour is straightforward. PAPSS handles settlement while the exchange manages trade infrastructure itself.
He provided a practical example of how this would work. Nestlé could purchase cocoa from Nigeria, Côte d'Ivoire, and Ghana through a single exchange, then use PAPSS to pay all three nations simultaneously.
Today, multinational corporations take a different route entirely. They bypass Africa altogether and purchase commodities through the London International Commodities Exchange (ICE) instead.
The UN Conference on Trade and Development (UNCTAD) has made bold projections about AfCFTA's potential. Full implementation could slash Africa's trade deficit by more than half.
Experts argue success hinges on creating supporting institutions. These must enable transparent price discovery, reliable settlement systems, and efficient cross-border logistics.
AfricanFarmer Mogaji, chief executive of Agbado Value Chain Ltd, echoed this view. "The international practice is purchasing commodities through exchanges or licensed warehouses," he noted.
A unified continental exchange would transform African business fundamentally. Companies would negotiate better deals and intra-Africa trade would scale rapidly, he argued.
Africa currently operates roughly 15 commodity exchanges, but they remain country-specific. No unified continental exchange exists yet.
This gap is striking given Africa's resource wealth. The continent holds approximately 30 percent of global mineral resources and produces major agricultural commodities.
Yet Africa remains a price-taker in international markets, not a price-setter. Commodity exchanges promise to disrupt this pattern and elevate the continent's bargaining power.
