Work on the proposed Ghana Commodity Exchange, designed to provide ready market for grains and cereal producers, has resumed after two years idling on the shelf, the Deputy Minister of Trade and Industry, Mr Kweku Ricketts-Hagan, has assured.
The deputy minister told the GRAPHIC BUSINESS in Tema on January 15 that the team working on it has furnished him with information and documents on what had been achieved so far which convinced him that the project would soon take off.
“I am studying it and I can assure you that the ministry will kick into action and get it going soon”, he said.
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.
The initiative is, however, set to be resuscitated and the deputy minister has been charged to lead the pack of individuals to make the dream come alive.
A commodity exchange is an arrangement where various commodities and derivative products on commodities are traded. It is similar to an equity market, but instead of buying or selling shares, one buys or sells commodities. Commodity exchange is one of the oldest prevailing markets in human history.
And the Warehouse Receipt System receives grains and stores them after categorising them by quality, weight, and delivery location and assigning weight to them.
Warehouse receipts issued at the warehouse operated through the exchange are stored in a central depository where title transfers are done.
Ghana’s commodity exchange, among other things, is expected to end the cycle of poverty among Ghanaian farmers, especially smallholder farmers due to post harvest losses.
It has been identified as having a huge potential to improve the functioning of agriculture 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; commercial 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.