Energy Product Derivatives - Eastern Africa

Eastern Africa

The nominal value in the Energy Product Derivatives market is projected to reach US$161.90bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 6.17% resulting in a projected total amount of US$218.40bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to US$0.21 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$26,910.00bn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 0.85m by 2029.

Market

Region

Region comparison

Currency

Analyst Opinion

The Energy Product Derivatives market in Eastern Africa is witnessing a notable increase in trading activities and market participation. Customer preferences in the Energy Product Derivatives market in Eastern Africa are shifting towards more diverse investment options and risk management strategies.

Investors are increasingly looking for opportunities to hedge against volatility in energy prices and capitalize on market fluctuations. This growing interest is driving the demand for a wider range of derivative products tailored to the energy sector. Trends in the market show a rise in the adoption of renewable energy derivatives in countries like Kenya and Ethiopia.

As governments in the region focus on sustainable energy solutions, there is a growing demand for derivatives linked to renewable energy sources such as solar and wind. This trend is not only driven by environmental concerns but also by the potential for higher returns in the long term. Local special circumstances, such as the discovery of oil reserves in Uganda and Tanzania, are influencing the Energy Product Derivatives market in Eastern Africa.

The anticipation of increased oil production in these countries is attracting investors and creating opportunities for derivative products linked to oil prices. Additionally, the development of infrastructure for oil transportation and distribution is further boosting the derivatives market in the region. Underlying macroeconomic factors, such as economic growth and political stability, play a crucial role in shaping the Energy Product Derivatives market in Eastern Africa.

As the region experiences steady economic expansion and improved governance, investor confidence is increasing. This positive economic outlook is driving investments in energy derivatives as market participants seek to capitalize on the region's growth potential and diversify their portfolios.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.