Zimbabwe Mercantile Exchange chief executive officer Collen Tapfumaneyi
THE absence of harmonised trading standards is delaying the implementation of a memorandum of understanding (MoU) signed in March 2025 between commodity exchanges in Zimbabwe, Malawi, Zambia, and Tanzania, it has been revealed.
In March, the Zimbabwe Mercantile Exchange (ZMX) hosted the Continental Free Trade Area association of commodity exchanges annual conference in Victoria Falls, where it signed an MoU with counterpart exchanges from Malawi (Agricultural Commodity Exchange for Africa), Zambia (Zambian Commodities Exchange), and Tanzania (Tanzania Mercantile Exchange).
The MoU aimed at enhancing the fungibility of commodities among the four nations to raise additional capital from these alternative markets.
ZMX chief executive officer Collen Tapfumaneyi told NewsDay Business that the lack of harmonised trading standards had slowed the MoU’s implementation.
“Lack of harmonised standards is one of the biggest issues that is slowing commodity trade between the four countries,”
he said.
“When it comes to the continental trading, yes, we did MoUs. What has taken time is agreeing on the modalities, and what we have realised is that there are other administration matters, if I may say so, on various the country sides that need to be established in terms of clearances, in terms of mutual recognition of standards, and in terms of each country’s view on quality on contamination and things like that.”
Tapfumaneyi said that where there was a little difference in terms of how one grades or assesses, it slowed the trading process.
“That’s where we are right now, in terms of aligning that, based on the specific individual commodities that we think are feasible to trade,” he said.
Tapfumaneyi added that these different standards within the countries needed to be looked at to help actualise the MoU.
ZMX has come up with a mechanism for determining import parity price, which will help to undercut the cost of imports as part of the actualisation of the MoU.
“You have to understand that not every commodity is feasible, in the sense that apart from just the price of that commodity, the logistical arrangements, and costs, if you build them into the price, it may become uncompetitive on either side,” he said.
“So, out of the potentially 40 or so commodities for each country, we have to identify which ones are viable. We have come up with a mechanism for determining import parity price and export parity price and comparing it with the price at the destination here, determining where it is favourable to export, where it is favourable to import.”
Once viable commodities are identified for trading on the exchanges, regulatory requirements for both exporting and importing will be needed.
“So, those are the things that are being worked on, and they are being worked on not only at the ZMX level but also at the AfCFTA [African Continental Free Trade Area] level, because it’s part of the AfCFTA process of ensuring that the trading is smooth,” Tapfumaneyi said.
He said the exchange had identified the commodities and agreed on pricing and transactions, adding that they were hopeful trade would soon begin.
Tapfumaneyi underscored the need to ensure certain conditions are met, such as scientific and technical requirements.
“The challenge is that our grading standards might differ, which can affect trade and pricing. For instance, what we consider grade A in Zimbabwe might not be the same in Tanzania,” Tapfumaneyi said.
“To resolve this, we need to harmonise our grading parameters, but it’s not a simple task. It requires technical alignment and international co-operation, as grading is governed by law in both
countries.”