Ethiopia Commodity Exchange-challenges and Opportunities of Liquidity
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Date
2008-06
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Addis Ababa University
Abstract
The Ethiopia Commodity Exchange (ECX), the first organized agricultural market, was established pursuant to Proclamation No. 550/2007 as a wholly owned government institution. The expectation is to revolutionize the existing inefficient agricultural market and thereby to bring about a meaningful contribution to the growth of the whole economy. The research, therefore, attempted to address the liquidity challenges and opportunities that might impede and/or facilitate the effort to realize this fundamental shift in marketing system. The research was mainly conducted through observation and critical evaluation of the ECX’s model vis-à-vis the environment in which it is operating. The result suggested that there are lots of challenges that might slow down the momentum of the change which might result in disruption the effort to accomplish the stakeholders’ expectation. So far, much is left to be desired in terms of designing a strategy to reduce the potential negative impact of the liquidity challenges. In lieu of this, possible solutions intended to be employed as a general road map for specific action plan, are recommended. Despite the foregoing, opportunities are already there to be scrutinized so that their leveraging potential be utilized. In brief, the launching of the ECX is a major breakthrough in Ethiopia’s attempt to modernize the existing agricultural market. But, success depends on how swift the reaction might be to the ongoing realities of the country and the major setbacks ahead.
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Exchange— Challenges and Opportunities