Farmers in the country, especially smallholder farmers, can heave a sigh of relief at last as key stakeholders in the commodities sector are ensuring that the Ghana Commodities Exchange (GCX) is established and becomes operational by the close of this year.
“This will enable the Ghanaian farmer to obtain fair and predictable pricing for their produce,” said United Nations Resident Coordinator, Ruby Sandhu-Rojon.
Ms. Ruby Sandhu-Rojon explained the creation of the exchange is seen as a means of providing an orderly, transparent, fair and efficient marketing system for commodities in general and agricultural produce in particular.
“Price volatility, fragmented markets, poor infrastructure, limited access to market information and affordable credit will also be curbed since they do not serve the interest of the smallholder farmers.
“Establishing an exchange could therefore enhance the transformative change envisioned in the Ghana Shared Growth and Development Agenda (GSGDA).
“The Commodities Exchange is an innovative tool to break the cycle of farming-related poverty and a means to promoting inclusive growth by enabling subsistence farmers to be active participants in the agricultural value chain.”
Seventy-five percent of the 1.2 billion people living on less than a dollar a day live and work in rural areas. Half of the world’s hungry people are from smallholder farming communities.
Another 20% are rural landless and about 10% live in communities whose livelihoods depend on agriculture. “Ghanaian farmers who live in smallholding farming communities will no longer be at the mercy of middlemen who more or less determine the prices of their produce,” Technical Committee Chairman of the GCX, Joe Tackie, said.
“The middlemen now become the aggregators to buy the commodities at the accepted price on the exchange, leaving the buyer and seller both satisfied because the farmer also knows the price of the product through his mobile phone.”
Ms Sandhu-Rojon said the positive impacts of the Commodities Exchange can facilitate the modernisation of agriculture and increase productivity. It will enhance market access, and ensure fair returns for smallholder farmers, resulting in the formalisation of informal agricultural trading activities.
The United Nations Development Programme has been working with the Ministry of Trade and Industry over the past year to support development of the legal and regulatory framework for the Commodities Exchange and warehouse receipt system.
These assertions were made at the opening of a two-week Ghana Commodities Exchange National Stakeholders Training and Sensitisation Workshop in Accra on the theme “Knowledge For Markets: Basics of Commodity Exchange Operation I”.
The workshop brought together 30 participants from the informal and formal private sector, the public sector, banking institutions and insurance brokers. It was aimed at developing people who will act as focal persons to manage and carry on the work of the exchange.
Participants will be benefitting from presentations delivered by executives of the Ethiopia Commodity Exchange Institute (EI), led by the Chief Executive Officer of the Ethiopian Commodity Exchange (ECX), Eleni Gabre-Madhin.
She said: “I believe after this workshop, the Ghana Commodities Exchange will be unique in its own right and become one that will be looked up to.” Dr. Gabre-Madhin noted that the ECX rang it first bell in April 2008 and traded over 138,000 tonnes of commodities, followed by 216,000 tonnes the next year.
It traded 508,000 tonnes last year, amounting to US$1.2billion. The Exchange clears about US$20million of commodities on a daily basis, which is ten times larger than clearing on the Ghana Stock Exchange.
It is also the only exchange on the continent that trades on a T+1 basis, which means that settlement of trades takes place a day after the transaction.
“Most of the exchanges on the continent trade on T+3 including the Nigerian, Johannesburg and Nairobi Stock Exchanges. Our commodity exchange is even five-times bigger than the Nairobi Stock Exchange,” Dr. Gabre-Madhin said.
Minister of Trade and Industry, Hannah Tetteh, said her Ministry is ready to promote the Commodities Exchange agenda because it will help farmers across the country and grow the economy.
“Imagine Nestlé and Guinness Ghana Limited purchasing all their raw materials needed for production from local farmers: our farmers will be motivated to get the right seeds and use the best fertilisers at the right time, which will lead to enhanced productivity and the economy will experience tremendous growth,” she said.
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