Ghana launches Commodities Exchange system

President Mahama with the executive members of GCX after the launch.                                          Photo: Vincent Dzatse

President Mahama with the executive members of GCX after the launch. Photo: Vincent Dzatse

PRESIDENT John Mahama yesterday launched in Accra, a national roadmap towards the establishment of a Ghana Commodity Exchange (GCX) and Warehouse Receipt System, expected to be fully functional in the middle of next year.

In connection with that, he said Cabinet had approved a Consolidated Security Industries Bill to ensure the legal framework that allowed the Security and Exchange Commission to regulate commodity exchanges and ware house receipt systems in the country.

A public-private partnership initiative, the GCX will be a modern market system, where buyers and sellers will come together to trade, assured of quality, delivery and payment.

The first of its kind in Ghana and West Africa, the GCX will be a national multi-commodity exchange that provides market integrity, by guaranteeing the product grade and quantity and operating a system of clearing and settling of contracts on a daily basis.

The proposed establishment of a well-functioning warehouse receipt system, on the other hand, will lead to an increase in the much-needed credit to agriculture by creating secure collateral for farmers, processors and traders, and smoothen market prices by facilitating sales throughout the year rather than just between harvests.

This will reduce risk in agricultural market, improve food security and credit access in rural areas and contribute to lower post-harvest losses due to better storage conditions.

The national launch of the road map to the GCX was to engage stakeholders including exporters, processors, marketers, industrial buyers, banking and insurance and policy makers in the GCX design, its objectives and benefits.

Launching it, President Mahama said the commodity exchange would improve the livelihood of farmers and other workers in the agricultural value chain when it became fully operational.

He stressed that the time had come for the country to shift from subsistence to market-oriented production.

Such a fundamental shift, he said, would require the emergence of costs and lower risks marketing systems that enable as many actors, sellers and buyers as possible, to participate.

As was being addressed through his administration’s agenda for transformation, President Mahama stressed that Ghana’s economy needed a swift paradigm shift from the existing economic drivers to more innovative measures that could be sustainable and provide the economy with the stimulus required to meet all growth targets.

He, therefore, indicated that the GCX and its accompanying ware house receipt system would augment the pace of the transformation agenda and move Ghana from an import-led economy to an export-driven one.

The President observed that countries that had successfully established functioning exchanges had economies that had transformed and impacted positively on the livelihoods of their peoples.

Mr. Mahama said the government had remained committed to reducing poverty through agricultural and rural development by ensuring that policies aimed at achieving that were workable and were in tune with developments around the world.

He observed that various policy documents like the 2010-2013 Ghana Shared Growth and Development Agenda stressed the need to focus on agriculture, fisheries, small and medium scale enterprises. It also underscores the central role of the country’s food and agricultural sector development policy.

Within that context, he said the establishment of the GCX was viewed as a key pillar to promote investment in the agriculture supply value chain and to create a marketing system that was transparent, efficient and reliable.

President Mahama gave the assurance that there was sufficient political will to see the GCX through.

Mr. Fifi Kwetey, Minister of Food and Agriculture, said the ministry would assist in terms of developing a warehouse system to help farmers to develop the habit of proper documentation, besides sharing the experiences of the National Buffer Stock Company.

Mr. Ekow Spio-Garbrah, Minister of Trade and Industry, said that with the support of development partners, some challenges associated with the commodity exchange project had been addressed.

He said the IFC, the UNDP and other organisations had expressed interest to invest in the GCX, and expressed appreciation to such institutions for the support.

By Samuel Nuamah

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