HARARE, (The Southern African Times) – Zimbabwean Finance Minister Mthuli Ncube on Wednesday announced the coming into operation of the Zimbabwe Mercantile Exchange, the country’s commodity exchange platform.
This follows the launch of the platform by the government in December last year and the subsequent finalization of legislation to regulate the registration of warehouses and the issuance, negotiation, trading and settlement of warehouse receipts through exchange infrastructure.
In a statement, Ncube said the exchange platform is a partnership between the Zimbabwean government and the private sector.
“The Zimbabwe Mercantile Exchange shall be based on warehouse receipt system and is designed to support agricultural development in Zimbabwe. This exchange will provide convenience and efficiency in the marketing of agricultural commodities and this will ensure enhanced profitability, access to markets, finance and credit for farmers,” Ncube said.
The infrastructure for the exchange is suitable for the trading of both commodities classified as strategic grains such as maize, wheat, and soybeans as well as any other agricultural commodities including barley, coffee, groundnuts, macadamia nuts, millet, oats, pecan nuts, rice, sorghum, sugar beans, tea, cowpeas and round nuts, Ncube said.
Agriculture forms the backbone of Zimbabwe’s economy, contributing more than 17 percent of GDP and providing employment and income for more than 65 percent of the country’s population.
“It is envisaged that the Exchange will facilitate the trading of all agricultural commodities, thereby ensuring that Zimbabwe has transparent and equitable trading of its resources in line with best practices. Given the required technical, operational and regulatory requirements, the warehouse receipt system and commodity exchange are now being operationalized, ” Ncube said.
The Zimbabwean government allocated 500,000 U.S. dollars in the 2021 national budget as its capital contribution towards the establishment of the commodity exchange.
“This public-private partnership will support the seamless trading of agricultural commodities by all players, including the government itself, on the commodities exchange,” Ncube said, adding that the exchange will help to address one of the key challenges facing farmers, that of poor storage facilities resulting in post-harvest losses.
It will also help to formalize small-scale farmers to ensure sustainability of their farming activities.
Zimbabwe previously had a commodity exchange which was closed when the government gave the monopoly to buy and sell maize and wheat to state grain procurer, the Grain Marketing Board, in 2001.