Lack of cooperation stalls commodity exchange agenda
The country is likely to miss its June 2016 deadline of starting the commodity exchange market due to the lack of support from some stakeholders, the Project Coordinator, Mr Robert Dowuono Owoo, has said.
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He said some of the potential actors within the commodity exchange market had failed to give their full backing to the project because they perceived it as a threat to their businesses.
“Some of them have been in this business for a long time and they see the coming into being of the exchange as a competition to their businesses. They think the exchange is going to engage in the buying and selling of agricultural products,” he stated.
He said the project was aimed at creating a platform for them to improve their businesses and not to compete with them, and, therefore, urged them to give it their full support.
Mr Owoo also pointed out the changing ecosystem in the environment as another challenge that had delayed the project.
He said the unstable nature of the ecosystem had made it very difficult to plan.
The Ghana Commodity Exchange (GCX), which will operate on a Warehouse Receipt System modelled after a similar one in Ethiopia, was expected to take off by December 2012 but could not materialise due to factors which included a change in leadership at the trade ministry.
Ghana’s commodity exchange, among other things, is expected to end the cycle of poverty among Ghanaian farmers, especially smallholder farmers, as it will help them address post-harvest losses.
It has been identified with a huge potential to improve the fortunes of the agricultural sector by enhancing price transparency, leading to increased farm output and incomes.
According to the Ministry of Trade and Industry, the GCX will promote agricultural investment, enhance productivity, encourage market access and fair returns for smallholder farmers and facilitate the formalisation of informal agricultural trading activities.
It is expected that the establishment of the Ghana Commodity Exchange will engage broad participation by small-scale producers, commercial growers, domestic traders, agro-processing industries, commodity exporters, the national buffer stock administration, food aid agencies and other institutional buyers.
“Moreover, key stakeholders in the exchange include banks engaged in settlement as well as warehouse receipt financing, quality certifiers, collateral managers, transport and logistics service providers, insurance providers, telecom operators, audit and accounting professionals, among others,” the ministry said in a project brief.
Progress so far
Mr Owoo stated that there had been progress despite the setbacks, as it was almost through with the design face of the project with all design parameters almost finalised.
“Once that is done, we will move into the implementation stage,” he said.
He said he was very hopeful that the full implementation would start before the end of the year.
Funding for the project
He said government had been very supportive as it remained the only investor to have released funds to get the project going.
He, however, disclosed that other investors such as Ecobank Ghana, Ghana Commercial Bank and the International Financial Corporation (IFC) of the World Bank had signed letters of intent but were yet to finalise the entire investment agreement.
He said the budget for the whole exchange set up was US$15 million. — GB