Increase pace for Commodity Exchange - Discussants

Accra, Sept. 6, GNA - Discussants at a roundtable in Accra have called for an accelerated establishment of a Ghanaian Commodity Exchange to give meaning to demands for increased food production in the food growing areas.

They said since Ghana's economy was basically agricultural, "it would make a lot of sense to see to the establishment of an effective commodity exchange that would not only eliminate the regular post-harvest losses through the buying of produce for storage, but put money in the pockets of farmers in the short-term to facilitate their downstream operations".

The Private Enterprise Foundation (PEF) organized the roundtable aimed at initiating debate and to quicken the pace of implementing a Ghanaian Commodity Exchange and Commodity Clearing House, which had had three failed attempts due to the unavailability of a regulatory framework.

Speaking to the Ghana News Agency, Dr Osei Boeh-Ocansey, Director-General of the PEF, said the existence of a commodity exchange would boost the GDP growth rate and place farmers and a host of industry players in a position to increase revenue and revitalize the private sector.

He noted that there was an urgent need to increase the pace of agriculture, industry and the manufacturing sector in the national economy.

Dr Boeh-Ocansey singled out the agricultural sector as a major industry, which when helped within the scope of the Commodity Exchange, could raise the hopes of millions of farmers, especially large-scale farmers and make their lives more meaningful.

Mr Alexis Anning, Managing Director of AFTECH and Consultant for the proposed Commodity Exchange, urged the Securities and Exchange Commission to come out with the needed regulatory framework to facilitate the Exchange and Clearing House.

He also underlined the importance of the agriculture sector in the scheme, which, he said, would help to change the face of poverty in the rural farming areas.

Mr Anning said the inefficiency of intermediation had resulted in high post-harvest losses in the agricultural sector and the limited ability to attract investment into value-addition in the form of processing.

Apart from cocoa that is traded on international exchanges, which serves as the benchmark for local pricing, purchasing and trading, most of the commodities produced cannot be linked directly to global exchanges.

There is therefore limited price discovery for them, which in turn, affects productivity of the sector.

Mr Anning said the strategic approach for the development of a commodities exchange in Ghana would involve the need to move locally-produced commodities from the current non-industrial production storage centres into accredited warehouses and silos, in standardized lots, graded, shelf-life certificated and insured with no loss guarantees.

In setting up the Exchange, Mr Anning called for infrastructure, legal framework, participation rules and dealing and settlement rules, as well as arbitration rules for the commodity sellback trades and the financial derivatives.