Botswana has locational and cooperative advantages that motivate for establishment of a multi commodity exchange (MCX) platform.
According to the Special Economic Zones Authority (SEZA), Botswana has six production special economic zones (SEZs) that can be optimised by setting up a consummated commodity exchanges platform that will remove barriers to integration, upgrade value chains and remedy the country’s fragmented and informal market structure.
Speaking at the just-ended Ghanzi Agriculture Show, President Mokgweetsi Masisi and SEZA Chief Executive Officer (CEO) Lonely Mogara were in sync in lauding the MCX as a worthy investment that will spur the national economy by reducing information asymmetries and eliminating intermediaries through easy dissemination of market prices.
“The MCX will facilitate economic inclusion by providing a well-coordinated framework that involves all key stakeholders like farmers, business, financiers as well as the public and private sector,” said President Masisi. He urged Batswana to change their mindset and embrace digital technologies and applications that can embed vast amounts of knowledge and skills for smart and efficient farming that yields high returns. “Digitisation is the way to go if we are to be more productive and food self-sufficient,” he added.
For his part, the chief executive of SEZA Mogara described the MCX as an organised marketplace where buyers and sellers come together to trade. Among other citizen empowerment attributes, he added, the MCX will unlock opportunities for new high growth companies and employment creation. “The platform will accommodate both hard and soft commodities – where soft commodities are from the agriculture sector and hard commodities are from the mineral sector,” he said. “This will remedy our informal market structures, remove barriers to integration and upgrade value chains. SEZA will work very closely with the Ministries of Agriculture, Minerals and Entrepreneurship to ensure a smooth rollout of this initiative.”
The platform, said Mogara, will facilitate the development of value chains as commodities will be processed before being passed to user industries in both local and export markets. In the context of Africa, an MCX would boost intra-regional trade, thereby enabling Botswana to exploit the market opportunities offered by the African Continental Free Trade Area (AfCFTA) – which comprises 55 countries with an estimated 1.3 billion consumers and a combined GDP of around $3.4 trillion.
SEZA was one of the headline sponsors at the Ghanzi Agriculture Show. According to statistics from the agricultural vaccination rollout of 2021/22, Ghanzi had 161, 833 beef cattle, 16,079 sheep and 31, 887 goats. “Therefore, Ghanzi is a key cluster that feeds into the Lobatse SEZ, which is themed as a Meat & Leather City at which key economic activities such as leather production, meat processing as well as dairy production will take place,” Mogara noted. The government has so far committed P379 million to development of the Lobatse Leather Park while SEZA has completed the master planning of the Lobatse SEZ at a cost of P8.5 million.