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Cabinet has approved a consolidated securities industry bill to provide a legal framework that allows the Securities and Exchange Commission (SEC) to regulate commodity exchanges and warehouse receipt systems in Ghana, among others.

President John Mahama, who disclosed this on Tuesday in Accra when he launched the Ghana Commodities Exchange (GCX), reiterated the commitment of his administration to reducing poverty through agricultural and rural development.

President Mahama said the launch marked a significant stage in the development of the agricultural value chain.

He was optimistic the system would create an orderly, transparent and efficient marketing system for Ghana’s key agricultural commodities to promote agricultural investment and productivity.

“This will encourage access and fair returns especially for smallholder farmers and formalise agricultural trading activities,” he said.

“The time has come for us to shift from subsistence to market-oriented production. The fundamental shift will require the emergence of low cost and low risk marketing systems even though it will require more buyers and sellers as possible to participate,” he noted, adding that “the move will augment the pace of our transformation agenda and move Ghana from an import led economy to an export-driven one.”

Ghana remains largely an agricultural economy, with approximately 56 percent employed in mainly small-holder agriculture, contributing almost 30 percent of GDP.

Various policy documents such as the 2010-2013 Ghana Shared Growth & Development Agenda (GSGDA) stress the need to cover agriculture, fisheries and small-scale enterprises while also underscoring the central role of the country’s Food & Agricultural Sector Development Policy for 2009-2015 known as the FASDEP II.

President Mahama also expressed satisfaction with private sector involvement in the development of the model for the exchange.

“This will reduce risks in agricultural markets, improve food security, improve access in rural areas and contribute to lower post-harvest losses with better storage conditions.”

Dr Eleni Gabre-Madhin, founder and former CEO of the Ethiopia Commodity Exchange which was launched in 2008, said Ghana’s exchange has the potential to become a leading West African hub for globally traded commodities.

Financed with minority equity investment from the government of Ghana and a private sector financing consortium, the GCX project will be implemented by the recognised industry leader in establishing and operating commodity exchanges in frontier markets.

The partners include Ecobank Ghana Ltd, UT Bank, the International Finance Corporation (IFC), 8 Miles Fund, a London-based private equity fund and eleni LLC.