Accra, Ghana - April 17, 2024 – As part of celebrations to mark its 5th year Anniversary, the Ghana Commodity Exchange (GCX) organized a symposium on Wednesday, April 17, 2024, under the theme "Transforming Commodity Trading through Structured Markets." The event served as a momentous occasion to reflect on the remarkable advancements the Exchange has achieved in revolutionizing commodity trading through structured markets over the past half-decade.
Partnering with IFC and GCB Bank this year to elevate the impact of our initiative, the inaugural edition of our annual event, marks the beginning of a tradition.
Over the past five years, GCX has played a pivotal role in reshaping commodity trading dynamics, fostering transparency, and enhancing efficiency in the market. This milestone anniversary offered an ideal juncture to acknowledge the collective efforts that have propelled the Exchange forward and to chart a course for continued growth and innovation.
“Government and by extension the Ministry of Food and Agriculture, as you are aware, recently launched the second phase of our flag ship initiative, Planting for Food and Jobs 2.0 (PFJ2.0). Under the PFJ2.0, I am pleased to inform you that, all the grains recovered under the program will be traded through the GCX. This is to further signify to us all that the Government is keen in ensuring that commodity trading in Ghana is done in a structured manner”, remarked the Minister for Food and Agriculture, Honourable Bryan Acheampong. “The GCX platform will ensure that the grains recovered are stored properly to reduce post-harvest losses, that the grains are sold at the right price through the price discovery mechanism and buyers are given good quality and right quantity for the grains they purchase”.
The symposium, attended by industry experts, policymakers, stakeholders, and esteemed guests, provided a platform for insightful discussions on the evolution of commodity trading. Participants had the opportunity to delve into the challenges faced and strategize for the future trajectory of the commodity trading sector.
The CEO of GCX, Mrs. Tucci Ivowi shared, “It is important to acknowledge the critical role the Ghana Commodity Exchange plays in advancing the Government's ambitious agenda to modernize the agricultural sector—a cornerstone of our Nation's quest for food security, employment creation, and poverty alleviation. GCX sits in a privileged position at the intersection of trade, agriculture, technology, and financial services. This is a core driver to bridging the gap between the youth and agriculture…. agribusiness is a goalpost for many more people than before.”
A critical success factor that ensures liquidity in any Exchange is the listing of an anchor commodity of high commercial value that will bring in the needed revenues to help develop and list other commodities.
This was a key takeaway from the address of the keynote lecture by agribusiness, agricultural development, and agricultural finance expert Mr Kwesi Korboe, also the CEO of GIRSAL. He shared how full or partial mandating in Exchanges is an intentional tool used by Governments to create liquidity for Exchanges. A classic example is the Ethiopian Commodity Exchange where the government mandated the trading of coffee on the Exchange in 2008 which catapulted ECX into a billion-dollar business.
Mr Kwesi Korboe suggested that for the case of Ghana, cocoa’s light crop and cashew should be mandated by the Government of Ghana to trade on GCX to reap the catalytic benefits of re-capitalization and revolutionary transformation in structured markets.
Another focal point of the symposium was the panel discussion on "Innovative Financing for Agriculture. The panel was composed of Mr. Robert Dowuona Owoo Esq., Chief Operations Officer, GCX, Mr. Joe Emmim, CEO, Adehyeman Savings and Loans, Mr. Wonder Adetor, Principal Economist, Ministry of Finance and Mr. Linus Kumi – Director, Corporate Banking, GCB Bank PLC, and moderated by Roselyn Siaw – Head Corporate Affairs & Communications, GCX.
The symposium served as an educational platform, enlightening stakeholders and participants on the significant impact of commodity trading through structured markets on the economy. By fostering transparency, efficiency, and risk management, structured markets play a pivotal role in promoting economic stability and growth. The Chief Executive Officer of GCX also seized the moment to announce the launch of the GCX Commodity Training & Certification program in partnership with the Ghana Institute of Securities & Investment, slated for its inaugural cohort in June, to underscore the Exchange’s commitment to knowledge dissemination and capacity building in commodities trading.
In attendance was Ms. Abena Amoah, Managing Director, Ghana Stock Exchange
In her concluding remarks, CEO GCX, Mrs. Tucci Ivowi stated, “As we chart the course for the future, sustainability remains a central tenet of our mission. We look forward to working with Government agencies in boosting access to markets and contributing to sector and economic growth, as much as we look forward to strengthening policy ties through a strong collaboration with the private sector.”
As the Ghana Commodity Exchange embarks on the next phase of its journey, it remains committed to driving innovation, fostering collaboration, and catalyzing positive change in the commodity trading landscape. The Exchange looks forward to continuing its transformative work, delivering value to stakeholders, and contributing to the sustainable development of Ghana's economy.
2nd Floor - Africa Trade House,
Ambassadorial Enclave Off Liberia Road
Ridge, Accra
Ghana - West Africa
Digital Address: GA-077-0681
Fill in your details and a copy of the membership form would be sent to your email. Please note that to complete registration, a fee of 50Ghs is charged upon delivery of your completed form to our office.
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Kumasi (April 24, 2018) The Ghana Commodity Exchange (GCX), a trading platform for physical commodities and futures contracts, under the auspices of the Ministry of Finance, piloted trading operations on the 24th of April 2018.
The Government of Ghana’s drive to support smallholder farmers, increase value along the agricultural value chain and provide export opportunities for Ghanaian commodities, has led to its investment in GCX, in its bid to structure the commodities market towards the eventual commencement of regular formal trading. This is being done by piloting the trading of maize in certain parts of the country, with maize stored in warehouses in Bonyo/Ejura in the Ashanti region and Sandema in the Upper West region.
On 24th April 2018, GCX brought together sellers and buyers of maize from all parts of the country to participate in its first auction trade which took place in Kumasi. 126 farmers were involved and several amongst them sold 136,000 GHS of trade during two (2) trading sessions, using a Reserve Auction trading mechanism. Buyers of maize had the opportunity to purchase high quality maize (GCX grade 1) whilst sellers (mostly small holder farmers) received premium prices and are benefiting from access to a wider market for their goods. Both parties benefiting from low transaction costs, the model presents a sustainable alternative to low prices and margins.
The Chief Executive Officer (CEO) Dr Kadri Alfah explains, “GCX initiated this pilot trading operation largely to demonstrate our structured trading concept which includes; commodity quality testing, grading, weighing, packaging and standardization, and to prepare our farmers and other market actors for our planned electronic trading and electronic warehouse receipts (e-WR) later this year. We are learning from other commodity exchanges that failed in Africa because they did not plan ahead to get the market behind them prior to the establishment of the trading platform”.
With many more of these trading sessions planned, GCX intends to use this initiative to educate and train market actors including farmers, farmer cooperatives, traders, brokers, financial institutions, regulators and warehouse operators to get everyone involved from the beginning.
During the first trade, farmers of White Maize were provided the opportunity to deposit their commodities, and have them graded, where they conformed to meet national and international market standards, prior to sale in a GCX Reserve Auction trading floor. Title was transferred from sellers to buyers using highly controlled contracts. GCX has established a system of performance guarantees including guaranteeing the quality and quantity of the commodity traded, freeing the farmers from the risk of commodity losses.
According to the farmers who participated in the trade, the auction was a simple, transparent and beneficial process. They were happy to receive the support to weigh and grade their grains. Some of them said they didn’t know they had high quality grains and could receive a premium for it. They were also happy to be presented with buyers which saved them time and cost. The biggest surprise for them was that they received contracts for their trade, with the guarantee from GCX that they would receive their cash settlement within five (5) days of the trade. This is fully in line with GCX’s objectives to help farmers sell their products at fair and competitive prices by providing them with real time price and market information while facilitating their access to financial institutions for loans and financing opportunities.
GCX has come at the right time to support the Government’s “Growth and Transformation Plan” to double production of key stable crops, improve storage and improve the general wellbeing of Ghanaian farmers and the people of Ghana. GCX is expected to play a crucial role in supporting government initiatives such as the Ministry of Food and Agriculture’s “Planting for Food and Jobs” and the “One District One Warehouse” initiative. GCX will support these initiatives by collaborating to provide warehousing management and quality control systems.
The GCX trading mechanism used for the pilot was a Reserve Auction. Interested buyers had the opportunity to interact with the farmers to discover prices in a fair and transparent manner. A Reserve Auction is a payment against delivery system whereby the farmers ( sellers ) announce a minimum price for their product incorporating their production cost in the sale price. The buyers then put in a bid to match the farmers’ asking price, factoring in transportation and other costs. By so doing, both the buyers and sellers hedge against their cost in a win-win situation for all.
30th May 2018: The Ghana Commodity Exchange (GCX) has brought together over forty (40) market actors from across several commodity value chains to provide inputs into the ongoing implementation phase. Members included representatives from farmer groups, aggregators, logistics companies, traders/brokers, agro-processors, manufacturers, financial institutions, insurance companies, and developmental organisations.
Representatives from the commodity value chain market actors form the GCX Market Council, who are playing key roles in the activities of the Ghana Commodity Exchange (GCX). The Council was established to solicit inputs and feedback on the various elements needed to ensure a successful implementation of the commodity exchange for Ghana.
During the session, the GCX team gave a status update on GCX activities, shared details on the GCX Membership Process and outlined the structure, rules and processes of the current trading activity that GCX was undertaking.
The GCX team explained that in its efforts at structuring the commodity market for the eventual spot trade activities later this year, the market council has a crucial role to play.
Whilst several challenges were highlighted by market council members, there were extremely positive sentiments regarding the role of the Exchange and a commitment by council members to champion the cause, providing insights and actions towards contributing to a successful establishment of the Exchange.
The GCX, in April of this year, commenced maize trading in spots through auctions (reserve). The owner of Akandem Farms, Mr. Maxwell Akandem shared his experience from one of these recent trade activities through the GCX, expressing his delight at the efficiency of the trading and the speed with which he received his cash settlement for his commodity sold.
On sustainability of the GCX, the council members opined the need for the GCX to ensure that operations would be continuously strengthened to help the nation deliver on its mandate towards greater financial inclusion, particularly regarding famers, and that the value chain as a whole would provide the ripple benefits expected.
Council members advocated a well thought out plan regarding transportation and other logistics, since that is a source of loss of goods, be it through theft, damage, or time lost. The GCX was urged to develop criteria or standards in the transportation chain in order to reduce potential frictions between truck owners and goods owners.
On the subject of the state of warehouse infrastructure across the country, council members requested the GCX to take practical steps to increase current stock by renovating and equipping warehouses with the right tools to enable farmers and producers of agricultural produce to have access to and use of the facilities. This will help reduce post-harvest losses in the country.
In his closing remarks, the Chief Executive Officer (CEO) of GCX, Dr. Kadri Alfah, expressed his appreciation to the market council members for showing commitment towards the establishment of the Commodity Exchange, which is expected to be the leading Exchange in West Africa. He stated that this will be the first of many gatherings by market council members to deliberate on issues and challenges surrounding the commodity value chain.
Supported by the World Bank Group (WBG), particularly the International Finance Corporation (IFC) and support from the Swiss Secretariat for Economic Affairs (SECO). The Securities and Exchange Commission brought together eighty-one (81) key stakeholders from the Central Bank (BOG); Ghana Commodity Exchange (GCX); Financial Institutions; Ministry of Food and Agriculture (MOFA), Brokerage Firms, Insurance companies, Farmer Groups, Academia, and more, for a review of Commodity Exchange and Warehouse Receipt System at the Alisa Hotel, Accra.
The Director General of SEC, Rev. Ogbamey Tetteh in his welcome address highlighted the relevance of warehousing and the need to grow the commodities market shepherded by a commodities exchange. He introduced the role of the regulator, opining that they would play a key part in building trust in the system.
Dr. Langyintuo (IFC Senior Technical Specialist for the Ghana WRS Project) in his presentation on the Project, reported that trade in Africa is a big challenge because of high risks, border related difficulties, standards, policy uncertainties and export finance. He explained the role warehouse receipts play in filling the gap for trade and collateral financing.
He recommended the following areas to be especially considered:
Dr. Langyintuo hinted that solutions could arise from friendlier tax regimes, non-discriminatory access to markets, non-interference with the functioning of the markets, honoring of internationally accepted standards, abiding by contractual undertakings, and ensuring the sector is free from corruption.
Dr. Kadri Alfah (Chief Executive Officer, GCX) gave an overview of the Warehouse Receipt System and Commodity Exchange. He indicated that the Ghana Commodity Exchange operates as a market and the WRS is a key component.
Dr. Alfah iterated that the Exchange’s rules are designed in the context of the Securities Industry Act and that it is a membership-based market with brokers who trade for themselves and on behalf of others. Dr. Alfah shared that the GCX has adapted its own standards for maize, rice and soy beans using the GSA standards as a benchmark.
He highlighted GCX’S current situation as follows:
- Identified 6 warehouses in Tamale, Wenchi, Ejura (3 warehouses) and Kumasi
- 65 members, including 2 Banks and off-takers with capacity to buy
- New office and trading platform almost ready
- Auction traded over 6,000 mini bags (this was designed to test the system which has been successful so far)
- Maize contracts designed
- Capacity building of market actors has commenced (40 trained)
The way forward according to Dr. Alfah is to get rules for the Exchange and WRS approved by SEC; passage of the WRS Legal Instrument (LI) and the Borrowers & Lenders Bill and build capacity of bank staff and other key stakeholders.
He stated that the bell for the commencement of official trading activities on the GCX platform is expected in November 2018. Finally, Dr. Alfah mentioned readiness of the warehouses; commodity price vitalities; getting interest rates below 20% for financing WHR; readiness of banks; banks accepting GCX performance bond for warehouse operations and passage of the WR and Commodity Exchanges’ regulations.
On the part of SEC, Evelyn Essien (Head of Exchanges) said SEC’s regulations are aimed at controlling behaviors of Exchange actors in the commodity market. She stated that the regulatory powers would be derived from Securities Industry Law, 2016 (ACT 929) and along the line, guidelines and circulars could be issued by SEC. SEC, according to Mrs. Essien, will keep a close eye on possible market abuse and crimes under the Act such as false trading and would apply penalties and other disciplinary measures such as revocation and suspension when necessary. Mr. Caliis Baidoo (Head of Legal, SEC) shared the regulatory components of the WRS, clarifying the role the WRS played within the context of a Commodity Exchange, so that they are clearly distinguished.
The session ended with a round table discussion chaired by Mr. Paul Ababio (Deputy Director General, SEC), with Mr. Robert Owoo (Project Director, GCX), Dr. A. Langyintuo and Caliis Baidoo, opening the floor for all participants to seek clarifications or share their own comments on the areas of operationalizing the WRS/ GCX; the role of technology, and other general business opportunities that would emerge as part of the Exchange ecosystem.
About Ghana Commodity Exchange (GCX)
GCX is a market / platform which brings buyers and sellers together to trade commodities including agricultural commodities, and as a body, guarantees the quantity and quality as well as prompt settlement (cash and delivery) of all products traded on the platform. This shields both buyers and sellers from physical and financial losses. GCX is regulated by the Securities and Exchange Commission and is managed by an experienced team of professionals with varied work experiences across the commodity value chain both in Ghana and abroad.