By Kofi AHOVI
The Securities and Exchange Commission of Ghana (SEC), the statutory regulator of the capital market is expected to complete the regulatory framework for the establishment of the commodities exchange and a warehouse receipts system in Ghana by the end of September 2010.
The legal and regulatory framework, which would regulate the modality in which commodities exchanges may be established, organized and operate, is to ensure that all those in the supply and value chain in agriculture benefit from their involvement.
The framework would consist of Dealing and settlement rules, Warehouse minimum standards/requirement, Warehouse receipts- minimum contents format implications, Commodity backed warrants-defined minimum requirements, Insurance coverage and Arbitration rules.
SEC in collaboration with the Natural Resources Institute UK organized three different workshops last year for stakeholder to make input into the modalities for the establishment of a commodities exchange and a warehouse receipts system in Ghana.
The workshop which was under the theme “promoting financial deepening in Ghana: the role of a vibrant commodities exchange and warehouse receipt system” was to set the right objectives and to examine and approve the right model that will work and fit Ghana's economy.
The country’s performance in the cocoa industry indicates that with proper organization and some institutional interventions such as commodities exchange the performance of the entire value chain in the agricultural sector could be improve efficiently and effectively.
Commodities exchanges provides for market transparency, efficient price discovery, standardization and is concomitant improvement in quality standards thereby assisting farmers to gain easy access to ready markets-both local and international.
It also provides a potent tool for a farmer to manage price fluctuations, stabilize his or her income and gain access to relatively cheaper credit.
Countries like Tanzania and South Africa are implementing the commodities exchange.
Experts have called for adequate information to support the system which will also build trust in the commodities market. They also called for the need to provide home-grow solutions to withstand price shocks.
The Natural Resources Institute which is a consultancy wing of the University of Greenwich has been contracted by the Securities & Exchange Commission under the Financial Sector Reforms of the Economic Management Capacity Building (EMCB) programme, to undertake a feasibility study into the establishment of a commodities exchange and supporting warehouse receipt system with particular emphasis on the Agricultural sector in Ghana.
The establishment of a Commodities and Warehouse Receipt System will help to modernise agriculture and other commodity sectors of the economy. It will particularly enhance Ghana’s competitiveness in commodity trade.
The Securities and Exchange Commission of Ghana (SEC), the statutory regulator of the capital market is expected to complete the regulatory framework for the establishment of the commodities exchange and a warehouse receipts system in Ghana by the end of September 2010.
The legal and regulatory framework, which would regulate the modality in which commodities exchanges may be established, organized and operate, is to ensure that all those in the supply and value chain in agriculture benefit from their involvement.
The framework would consist of Dealing and settlement rules, Warehouse minimum standards/requirement, Warehouse receipts- minimum contents format implications, Commodity backed warrants-defined minimum requirements, Insurance coverage and Arbitration rules.
SEC in collaboration with the Natural Resources Institute UK organized three different workshops last year for stakeholder to make input into the modalities for the establishment of a commodities exchange and a warehouse receipts system in Ghana.
The workshop which was under the theme “promoting financial deepening in Ghana: the role of a vibrant commodities exchange and warehouse receipt system” was to set the right objectives and to examine and approve the right model that will work and fit Ghana's economy.
The country’s performance in the cocoa industry indicates that with proper organization and some institutional interventions such as commodities exchange the performance of the entire value chain in the agricultural sector could be improve efficiently and effectively.
Commodities exchanges provides for market transparency, efficient price discovery, standardization and is concomitant improvement in quality standards thereby assisting farmers to gain easy access to ready markets-both local and international.
It also provides a potent tool for a farmer to manage price fluctuations, stabilize his or her income and gain access to relatively cheaper credit.
Countries like Tanzania and South Africa are implementing the commodities exchange.
Experts have called for adequate information to support the system which will also build trust in the commodities market. They also called for the need to provide home-grow solutions to withstand price shocks.
The Natural Resources Institute which is a consultancy wing of the University of Greenwich has been contracted by the Securities & Exchange Commission under the Financial Sector Reforms of the Economic Management Capacity Building (EMCB) programme, to undertake a feasibility study into the establishment of a commodities exchange and supporting warehouse receipt system with particular emphasis on the Agricultural sector in Ghana.
The establishment of a Commodities and Warehouse Receipt System will help to modernise agriculture and other commodity sectors of the economy. It will particularly enhance Ghana’s competitiveness in commodity trade.
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