“As a knowledge organization, we at UNDP are fully cognizant of the critical role that knowledge sharing plays to bring about transformational development” Eugene Owusu, Resident Representative of the UNDP Ethiopia told participants from over 14 African countries, as well as experts in the commodity exchanges and financial sector from Europe, Asia and the US, attending a meeting to discuss Commodity Exchanges in Africa. But he cautioned that “It would be remiss of us if in years to come we look back at the end of this intensive two-day session, and simply say that all we did was share knowledge”.

The two-day meeting, held in Addis Ababa, Ethiopia under the theme ‘Convening on Commodity Exchanges in Africa: Realizing the Promise and the Potential’ brought together participants from the government, commodity exchanges, technology providers, bankers and others to debate and discuss, at plenary panels and breakout sessions, on the issue of exchanges in the global and African context, the roles of the public and private sectors and the middlemen, the relationship between price volatility and exchanges, as well as the transparency offered by exchanges and the value to key stakeholders particularly Africa’s farmers.

Some African countries already have their own exchanges including Uganda which has established its exchange in 2007, Ethiopia and Malawi in 2008, and Zambia in 2009. Rwanda is working on it with full government commitment with a view to setting up their commodity exchange in a year’s time, while Kenya has set up a task force.

“This was a solid gathering of the best of Africa and of the world who came to honestly reflect,” said Eleni Genre-madhin, CEO of the Ethiopian Commodity Exchange (ECX) and alongside the UNDP, co-organiser of the convening. The ECX was celebrated as one of the continent’s rising stars in the area of commodity exchange.

Exchanges give farmers transparency, efficiency, and reduce transaction costs, as well as an assurance of market for their produce. There was no consensus as to what the relationship between exchanges and price volatility, as the one currently witnessed in the international commodity market, could be. But then produces as well as some governments which hoard some critical grains, such as rice in Asia, could have a destabilizing effect on the market. Overall the panelists of the two day meeting seemed to agree more on the role of exchanges to reduce volatility.

The ECX, which recently boasted of handling a million transactions with zero errors, reports that it receives several thousand calls every hour from people, the majority farmers, seeking market information. Ethiopian farmers, once hardly aware of situations beyond their village markets, now enquire about prices in international markets, according to the ECX CEO.