In a significant step toward regional economic integration, four major commodity exchanges from Southern Africa have signed a Memorandum of Understanding (MOU) to streamline agricultural trade and enhance food security. This agreement brings together the Agricultural Commodity Exchange for Africa (Malawi), the Zambian Agricultural Commodity Exchange (ZAMACE), the Zimbabwe Mercantile Exchange (ZMX), and the Tanzania Mercantile Exchange (TMX), establishing a framework for the efficient movement of surplus and deficit commodities such as maize and wheat across borders.
The initiative follows the successful model of the Southern African Power Pool (SAPP), which has facilitated regional electricity trading since 1995. By adopting a similar approach, the participating exchanges seek to create a more structured and transparent agricultural market, reducing trade inefficiencies and price volatility while increasing liquidity and opportunities for farmers and traders.
Kristian Moller, CEO of Malawi’s Agricultural Commodity Exchange for Africa, emphasized the practical benefits of the collaboration, citing recent trade opportunities that prompted the agreement. “We saw a specific case where Zimbabwe had excess wheat and Malawi had excess soybeans, and a swap made perfect sense. This led us to develop a modality for such trades. We then expanded the initiative to include ZAMACE and TMX, creating a unified framework for regional trade,” he explained.
The agreement is expected to ease trade restrictions and create an enabling environment for structured commodity trading, which has been a persistent challenge in the region. Nedbank South Africa’s Head of Agricultural Commodities, Zhann Meyer, underscored the significance of the MOU in fostering cross-border trade and addressing regional food security. “This agreement demonstrates the region’s recognition of the importance of trade and food security, not just nationally, but regionally. I’m hopeful that this MOU will unlock trade barriers and enhance food security across the region,” he said.
Grain Millers Association Chairperson, Tafadzwa Musarara, echoed similar sentiments, highlighting the potential for investor attraction and improved commodity procurement. “This agreement addresses regional food security, which is paramount. We need to support each other through trade, and we are pleased to be moving in this direction and hope to attract investors to fund the procurement and trade of commodities like maize across borders.”
Beyond trade facilitation, the MOU is also seen as a mechanism to address regulatory challenges that often hinder the smooth movement of agricultural goods. Zimbabwe’s Country Director and Representative for the World Food Programme (WFP), Barbara Clemens, commended the agreement for proactively addressing trade barriers. “It is imperative to remove trade barriers to ensure the smooth movement of goods. This MOU is commendable, as it aims to pre-emptively address regulatory issues that impede trade, ensuring seamless transactions,” she said.
Integrated regional commodity markets have the potential to significantly contribute to economic stability, reducing reliance on external imports and strengthening domestic agricultural production. By fostering a more interconnected trading environment, the newly formed partnership is set to improve price discovery, promote efficiency, and create a resilient food supply network for Eastern and Southern Africa. The success of this initiative will depend on sustained policy support, private sector participation, and the continued commitment of regional stakeholders to facilitating agricultural trade and investment.
