Zim must adopt commodities exchange

HARARE - Zimbabwe must introduce an agriculture commodity exchange in an effort to revive the sector, an international investor has said.

Alternative Investments Africa (Altvest) founding partner Tichaona Seremani said the country’s agricultural sector used to be vibrant when the commodities exchange was operational and urged stakeholders to work together to revive the local market.

“Agriculture has changed over the last 16 years, and with those changes the need for a marketing hub has intensified.

“Zimbabwe has an opportunity now to create a commodity exchange that is best and next in practice for Africa,” he said.

Zimbabwe previously had a thriving commodity exchange, which was closed in 2001 when the government gave the monopoly on corn and wheat trading to the Grain Marketing Board.

Efforts to revive the exchange have, however, met stiff resistance from government officials who have made it their mandate to ensure that it doesn’t see the light of day.

Seremani noted that the Ethiopian model, which government studied in shaping Zimbabwe’s model, was the most successful execution of a commodity exchange in Africa.

“It gives us an opportunity to avoid pitfalls from a strategic, operational and regulatory viewpoint so it is a good thing to learn from their model.

“It also gives Zimbabwe an opportunity to consider the adjustments and customisations that will best suit it,” he added.

Altvest, an investor in unlisted equities and advisor for medium-sized companies, has been at the forefront urging local authorities to invest in appropriate agro-technologies such as drought-resistant seed varieties and farming practices that essentially allow Zimbabwe to be competitive.

“This demands data analytics, continuous analysis of commodity markets and prices,” he said adding that there was need to see more industry-led initiatives across agricultural value chains.

“The major beneficiaries will, in any event, be companies providing finances, logistics, fertilisers and chemicals- amongst other industry stakeholders,” Seremani said.

Commodity exchanges are part of a move to try to revitalise agricultural productivity in Africa and should be seen as part of a holistic solution, including agricultural extension, support infrastructure for small farmers including quality warehousing, and finance as well as market price information.

Other countries that have established commodities exchange in Africa include Kenya, Malawi, Ethiopia, South Africa and Zambia among others.

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