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Established in 2008, the ground-breaking ECX has boosted exports in Ethiopia, and improved conditions for producers/XINHUA

Kenya

Smell the coffee: Ethiopia’s commodity exchange boosts growth

According to Akalu Woube, head buyer at Ethiopia’s Tomoca Coffee, better varieties are available at a lower cost due to competitive selling and, conveniently, can be sourced in one place.

“We get a variety of coffees, different tastes…so we can get whatever amount we need,” he told AFP, standing in his bustling cafe established 60 years ago, Addis Ababa’s oldest.

“You don’t spend time searching for coffee from here and there, in one centre we can have everything,” he added.

Tomoca mainly purchases coffee for local consumption – about half of all coffee traded at the ECX stays inside Ethiopia – but Akalu said the company plans to boost exports to Europe and other African countries.

The exchange could help wider economic development, experts say.

“The experiences made from ECX could be useful when Ethiopia is ready to introduce a stock exchange, which could expand investment opportunities and help raise savings,” said Jan Mikkelsen, head of the International Monetary Fund in Ethiopia.

But challenges remain, with its capacity capped by limited warehouse space to store goods, and poor infrastructure including unreliable telecommunications restricting ECX’s ability to keep farmers informed, said Anteneh.

“This is a major impediment for the expansion,” said Anteneh.

But Anteneh said ECX plans to outsource warehouse management – allowing for the introduction of more commodities such as chickpeas and wheat – as well as an online trading system so that trades can be also be made on the Internet.

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Coffee exporter Gebre Mezgebe said the exchange has meant he is now paid on time, since under the previous system of auctions payment was often delayed, or even never came through.

“When we sell today, you can get your money tomorrow… this is the main problem solved by ECX,” he said.

However, remote selling has also raised the risk of delayed deliveries and spotty quality, Gebre added.

But despite the glitches, Anteneh said he wants ECX to grow further, and looks forward to a time when countries across Africa are connected through national and regional commodities exchanges, boosting economic growth.

“This is my wish, to see the major commodities that Africa produces quoted in an African exchange,” he said.

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