columnBy Gertrude Majyambere
RWANDA can borrow a leaf from Ethiopia in establishing a well functioning commodity exchange market as it plans to establish a similar facility.
During the African Development Bank (AfDB) annual meetings in Arusha, Tanzania last week, it was brought to light that the Ethiopia Commodity Exchange (ECX) proved that agriculture can be transformed to lead Africa's growth.
Eleni Z Gabre Madhin, the Chief Executive Officer (CEO) of ECX told Business Times in an exclusive interview that since its launch, the market has provided farmers access to real time pricing information, improved quality, quantity and guaranteed timely delivery and payments.
"I see transparency, reliability and confidence to farmers who used to be blind to their produce," she said.
The market trades in beans, sesame, coffee, maize and wheat.
The market has also been credited with stabilising the domestic supply chains, supporting agro-processors and exporters,
According to Madhin, the agro-process chain was very weak due to lack of consistency in supply.
Rwanda is in the process of setting up its own commodity exchange to be known as the Rwanda Commodity Exchange (RCX) as the country seeks to reduce on the number intermediaries between farmers and buyers to ensure better prices for farmers.
"It is my dream that the lessons learnt in Ethiopia can be used in the whole continent to develop vibrant economies and I firmly believe that it's our time to use our own solutions to serve our societies the best way we can," she said.
Once established, the Rwanda Commodity Exchange would begin by trading agricultural commodities such as cereals, grains, coffee and tea with plans to expand to metals, minerals and energy resources.
The Ethiopia Commodity Exchange grades the produce to assist farmers to receive more money through improved quality. Started in 2008, on average the ECX trades a total of US$20 million every day thus gaining acclaim as one of Africa's most successful stories. Last year, it recorded a turnover of US$1.2 billion.
It has also opened huge potential for farmers and enabled them to access finance.
During a high level debate organised by African Finance Corporation and AfDB on Africans Transforming Africa, Madhin said her country had focused on agricultural development with a focus on infrastructural development like roads to benefit small holder farmers to access markets.