Commodity Exchange GhanaCommodity traders have lauded plans by the Ghana Grains Council (GGC) to implement a Warehouse Receipt System as a necessary step towards the development of a commodity exchange in the country.

The Chief Executive Officer of Commodities Clearing House and Finance, Alexis Aning, said the initiative to get a Warehouse Receipt System (WRS) ahead of the introduction of the proposed Ghana Commodities Exchange is essential to the success of the Exchange.

“A credible Warehouse Receipt System, which is robustly regulated, is absolutely essential to the operations of the emerging commodities exchange in Ghana. 

The absence of this has proved to be the key missing link in the failure of many exchange initiatives in Africa including the Abuja Securities & Commodities Exchange, in Nigeria and the Uganda Commodities Exchange,” he said.

Mr. Aning, whose company has been involved in the trading of commodities over the last two decades, noted that the Ghana Grains Council has already developed a robust regulatory framework of Warehouse Receipt System that has been adopted by the Joint Task Force for the implementation of the WRS and Commodities Exchange in the country.
He, however, called for development of a reliable, cost-effective and fast clearing and settlement system to complement this delivery system in order to guarantee payment for traded commodities.

“It is expected that this service will be offered by clearing members (financial institutions) of the exchange.

“To complement these, the proposed Commodities Exchange will also be required to institute an arbitration/mediation system which leads to quick, fair and low-cost resolution of trade disputes. The GGC has already incorporated this in its regulatory framework,” he said.

Mr. Aning said there is the need for policymakers to facilitate the introduction of a commodity exchange in the country in order to make commodities beneficial to the growth of the economy.

“We must either develop the commodities exchange market now or we lose out,” he said.

The Commodities Exchange is an innovative tool to break the cycle of farming-related poverty and a means to promoting inclusive growth by enabling subsistence farmers to be active participants in the agricultural value chain.

The introduction of the commodities exchange in the country is envisaged to ensure that local farmers obtain fair and predictable pricing for their produce through the provision of an orderly, transparent, fair and efficient marketing system for commodities in general and agricultural produce in particular.

By Evans Boah-Mensah

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