Ethiopia Commodity Exchange--Challenges and Opportunities of Liquidity
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Date
2008-06
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A.A.U
Abstract
The Ethiopia Commodity Exchange (ECX), the first organized agricultural market, was
established pursuant to Proclamation No. 55012007 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-a-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 sCl1ltinized 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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Keywords
Ethiopia Commodity Exchange, Liquidity Challenges