Ghana Ready To Shift To Market-Oriented Agriculture Economy

Stakeholders of Ghana’s agriculture sector have all supported that, the time has come for us to shift from subsistence to market-oriented production.

The fundamental shift will require the emergence of low cost and low risk marketing systems even though it will require more buyers and sellers as possible to participate.

The move will augment the pace of our transformation agenda and move Ghana from an import led economy to an export-driven one.

The good news of this to agriculturists is that, it will reduce risks in agricultural markets, improve food security, improve access in rural areas and contribute to lower post-harvest losses with better storage conditions.

Ghana remains largely an agricultural economy, with approximately 56 percent employed in mainly small-holder agriculture, contributing almost 30 percent of GDP.

In line of the move, Cabinet last week approved a consolidated securities industry bill to provide a legal framework that allows the Securities and Exchange Commission (SEC) to regulate commodity exchanges and warehouse receipt systems among others in the country.

This was disclosed by President John Mahama, when he launched the Ghana Commodities Exchange (GCX). He reiterated the commitment of his administration to reducing poverty through agricultural and rural development.

President Mahama said the launch marked a significant stage in the development of the agricultural value chain.

He was optimistic the system would create an orderly, transparent and efficient marketing system for Ghana’s key agricultural commodities to promote agricultural investment and productivity.

“This will encourage access and fair returns especially for smallholder farmers and formalise agricultural trading activities,” he said.

President Mahama also expressed satisfaction with private sector involvement in the development of the model for the exchange.

The GCX is a private-public partnership initiative, which is aimed at transforming agriculture through creating a state-of the art transparent and professional market institution, impacting the lives of millions of Ghana's small producers and all others in the marketing chain.

The GCX would become fully operational by the middle of 2016.

Hope of success is high as some experts have already expressed their anticipated hope and optimism, Dr. Eleni Gabre-Madhin, founder and former CEO of the Ethiopia Commodity Exchange which was launched in 2008, said Ghana’s exchange has the potential to become a leading West African hub for globally traded commodities.

Financed with minority equity investment from the government of Ghana and a private sector financing consortium, the GCX project will be implemented by the recognised industry leader in establishing and operating commodity exchanges in frontier markets.

First in the West African Sub Region, the GCX would be a national multi-commodity exchange that would provide market integrity by guaranteeing the product grade among other things.

Already, the Ministry of Trade and Industry has disbursed funding ahead of all private sector investments to begin designing the project and to ensure safety and security at the warehouses.

Dr Ekwow Spio-Garbrah, Minister of Trade and Industry, said the project would subsequently be beneficial to all smallholder farmers as prices of their products would be streamlined.

He said Ghana though the first in the West African sub region to launch the GCX for implementation, it would learn from other countries in the continent that have over the years have introduced similar projects.

The Trade Minister commended European Union and United Nations Development Programme for supporting the project.

Mr Fiifi Kwetey, Minister of Food and Agriculture, called for the strict adherence to contracts and agreements in the implementation of the programme.

"In ensuring success, respect for contracts are necessary in the execution of the project."

The project, which is sponsored by government in collaboration with players like Sector Investor consortium and Eleni LLC as Technical Partners would be a modern market system, where buyers and sellers would come together to trade, assured of quality delivery and payment.

The partners include Ecobank Ghana Ltd, UT Bank, the International Finance Corporation (IFC), 8 Miles Fund, a London-based private equity fund.