The role of the Ghana Commodity Exchange in improving general agricultural sector performance in Ghana
Date
2020-05
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Abstract
Ghana, in a bid to modernize and create an efficient agricultural market, launched the
Ghana Commodity Exchange (GCX). The exchange is an organized trading hub
intended to link agricultural commodity producers and buyers. However, the benefits
of commodity exchanges and their impact in developing countries such as Ghana are
not well known. This paper therefore explored the role of the Ghana Commodity
Exchange in improving the performance of key agriculture sector players particularly
farmers. The relevant question asked was, are farmers currently benefiting in some
way from the GCX? Primary data in the form of interviews was collected and
analyzed to answer the research question. Players in the market including farmers,
buyers, middle men, and personnel of the GCX were interviewed. The findings from
this research revealed that, price discovery had been achieved, to an extent, and that,
farmers were in a better position to bargain because they now had access to price
information which they did not have before. The exchange was also successful in
centralizing trade and the transactions costs involved in finding a suitable buyer or
seller at a suitable price was reduced my means of the exchange. The paper also
revealed challenges which include poorly developed infrastructure such as roads and
warehouses. Overall, the GCX is making steps in the right direction to create a more
efficient agricultural market. The support of the government of Ghana is however
needed to improve the exchanges operations and enable them to obtain their
objectives.
Description
Undergraduate thesis submitted to the Department of Business Administration, Ashesi University, in partial fulfillment of Bachelor of Science degree in Business Administration, May 2020
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Keywords
Ghana Commodity Exchange (GCX), agricultural products, commodity exchange, transparency, warehouses