Commodities Exchange still on course

Trade and Industry Minister Ms. Hannah Tetteh has said that the Ghana Commodities Exchange (GCX) will be ready this year.

She told the media in Accra this week that a national technical committee chaired by herself has been set up to manage establishment of the Exchange.

The GCX will be a market for trading agricultural products and raw materials using contracts that guarantee the price for both buyer and seller.

“The legal and regulatory framework of the GCX has been prepared with funding support from the United Nations Development Programme (UNDP) and is expected to be submitted to Cabinet for approval.

“A two-week training programme has also been organised for key stakeholders by the Ethiopian Commodity Institute as part of the preparatory activities,” Ms. Tetteh said. 

She said one of the mandates of the Ministry is to help address inadequacies in the distribution and marketing of locally produced commodities, particularly agricultural products. 

The GCX when established will create an orderly, transparent, and efficient marketing system for the country’s key agricultural commodities to promote agricultural investment, enhance productivity, and encourage market access and fair returns for smallholder farmers. 

The exchange will also guarantee buyers of the minimum quality, weight and prompt delivery of their purchases through a Warehouse Receipts System.

Ms. Tetteh disclosed that government has set up a special body made up of officials from the Ministry of Finance and Economic Planning, Food and Agriculture, Trade and Industry as well as the Securities and Exchange Commission (SEC) to design models for the Exchange, which will be adapted to the country’s business environment.

SEC, the lead promoter of the Exchange and the warehouse receipts system, has developed the necessary regulatory framework to support its establishment.

The framework will regulate the way in which the exchange is established, organised and operated to ensure that all those in the supply and value chain of the agricultural sector benefit from their involvement.

Millions of farmers stand to benefit from the GCX as it will help them manage price fluctuations, stabilise their incomes, and gain access to credit. 

After three failed attempts, the GCX will make Ghana the fifth country in Africa after South Africa, Nigeria, Kenya and Ethiopia to operate a commodities exchange. 

Properly functioning exchanges are reckoned to play a big role in poverty alleviation by increasing the incomes of agricultural producers, especially in sub-Saharan Africa where the majority of them are poor.

“There is no doubt that a commodity exchange for futures trading is necessary for the efficient functioning of an economy,” said Joe Tackie, National Coordinator for establishment of the GCX.