West Africa’s first and Africa’s third commodities exchange has been launched in Accra, to give Ghanaian farmers a ready market for their produce and for them to receive payment for that produce within 24hours.
From its trading centre in Accra, the exchange will link buyers and sellers from across the country, and will in the first year of its operations trade staples like maize, soy, rice, millet and sorghum.
Cashew, cocoa, timber, Shea butter and vegetables will be traded by the second year, while by the third-year metals, minerals and petroleum products will be added.
Headed by the former CEO of the Ghana Grains Council, Dr. Kadri Alfah, the GCX is starting with six warehouses located at Kumasi, Wenchi, Ejura, Tamale and Sandema, and expects to trade about 30,000mt of staples in the first year.
“We are starting with spot trading, meaning that transactions are carried out and settlement is done immediately,” Dr. Kadri Alfah said at the launch, which was attended by President Akufo-Addo and the ministers of finance, agriculture and trade.
“We know that our farmers and markets are still exposed to market risk due to price movements. Within three years we plan to delve into derivatives and futures contracts, where transactions are carried out but settlement is done in the future,” Dr. Alfah added.
Launching the exchange, President Akufo-Addo bemoaned the challenges farmers go through in trying to sell their produce – from word of mouth contracts that are sometimes not honoured by buyers, to price volatility issues.
He therefore assured that government will make sure the exchange delivers on its mandate, and promotes high productivity, price stability, increased exports, and reduced imports of commodities.
“The Exchange, in light of the emerging regional and continental free trade area, can position Ghana as the premier West African global trading hub,” he added.
The membership-based exchange has, so far, registered over 70 buyers, sellers and brokers, with four commercial banks designated to do settlements – provide cash transfer and other financial services to members.