Ghana Commodities Exchange signs MOU with TAFT GROUP, led by Alan Assibey.

How I see it: An “Exchange” is an institution used for the trading. A Stock Exchange trades stock. Ghana Commodities Exchange (abbreviated as GCX) therefore trades commodities. For a predominantly agricultural nation like Ghana, an institution like GCX really tickles my fancy. This is an era where of all thing that John Dumelo could do as his core business, he chose farming, alongside over 50% of our labour force who are engaged in the agriculture.

Agriculture contributes to over 50% of Ghana’s GDP. While I can try to get you as excited as I am about the Ghana Commodities Exchange and what it means for all of us, I figured TAFT Group has been tasked with the establishment and fortification of the requisite arms of a highly tentacled GXC capable of competing on the world stage. So why not hear from the son of Ghana himself leading the charge, Alan Assibey, CEO of TAFT Group, pictured in this article.

He has set up an all-inclusive Implementation Committee to devise innovative ways of providing GCX with the necessary tools to develop Ghana’s Agribusiness sector, engaging the combined expertise and resources of its members. After Tuesday’s meeting, I engaged Alan to recap (for you) why we are all very enthusiastic about our work with the Ghana Commodities Exchange. I won’t be paraphrasing his words. I asked questions, he answered them, we captured the conversation on a phone and an aide transcribed it later. Here it is. Read it in the slightly British accent he tends to switch on when he’s ideating. I hope you enjoy the read and be motivated!

From your viewpoint, what main opportunities does the Ghana Commodities Exchange provide the Ghanaian farmer and entrepreneur now and later?

From my point of view, I believe that the main opportunities that GCX provides the Ghanaian Farmer and the Entrepreneur, is basically its ability to be a catalyst for growth in our Agricultural Sector. An institution of such relevance should work without impediment, and that tends to be my greatest fear, that it might not work as well because of political interference. However, should that not be the case and GTX is allowed to evolve in the way that it’s expected to or the way that I see it happening, I see lots of benefits to the farmer.

One practical benefit of GCX to the farmers is to have the Exchange play this big over-arching role that buys big enough quantities for the majority of farmers to partake in international trade. So, let’s take the scenario of cashew for example.

Every year, various people from other countries depend on our country for cashew. They physically go into the bushes themselves to buy these cashews and they bargain down the prices because they are in control. So, the farmer is at a disadvantage. How much do they want to sell it at? Is that price a fair price? These are the things that we need to be looking at and why we really must encourage GCX to achieve its goal. Because then farmers can then get a fair price for a product without somebody coming into the bush at well below world market prices.

The availability of the vast market for their goods on an international level also opens a whole new ray arrays of doors and most importantly, this gives control and value right back to the farmers.

What is TAFT Group’s main objective in working with GCX?

Our main objective is to contribute and actually be part of that growth.

I believe that what we bring to the table is an international dimension to the whole commodities exchange. In that line of thought, I honestly believe that GCX needs to focus on internationally traded commodities, as well as encouraging and facilitating international trade of commodities that are grown locally.

The good thing about the structure of the GCX as it stands is that it can be a multiple-jurisdiction establishment across the continent. And again, if structured well and implemented well, it can act as a catalyst not just in Ghana but in all the other African countries, being the pivot and a platform for all these countries to sell their commodities to international markets.

This is where I see true value in GCX.

Already we have begun work with a Hedge Fund in the UK to provide funding for the Exchange. We also have the South African Commodities Exchange on board, alongside large commodities trading companies in SA.

I’ve been in the commodities trading sector for about two decades. Before that, the company that I worked for has traded in commodities for the last 35 years. All the various commodities trading companies that I have dealt with in the past are coming on board to trade through the GCX, same goes for you Maxwell and every other member of the Committee.

I would like to see the GCX listed on the London Stock Exchange sometime in the future, for international exposure.

International Trade currently seems so complex and dispiriting to locals. I encounter this a lot. How is TAFT Group and GCX going to help change that?

I totally agree. It’s does seem complex. International Trade is complex because there’s so many documents you’d usually need letters of credit and bank guarantees and stuff like that which are sophisticated financial instruments that the average farmer is less likely to understand. Plus, even if they do understand, how do they access it? This has usually been some of the complexities.

But down of the back of GCX, they can now easily access this umbrella that will allow for various players to plug in directly, no hustle. Ok small hustle [he laughs] because yeah, your farm produce has got to meet the international standard but after that, GCX does most of the heavily lifting for you. And so, you get to the point where local and international traders can come to the GCX and say, “I want x number of tonnes of this and that crops”.

International Trade simplified for buyer AND seller.

This MOU brings the full resources of a fleet of companies to the table. What value can the public expect to see from each of them?

This is not about me just bringing value. Our collective expertise and experience on this Committee help but all entrepreneurs and businessmen should see the great and varied windows of opportunities here. GCX has a system operating already but what we can do is that downstream, from the farmer right up until they get to the GCX, there’s loads of opportunities that I would encourage every entrepreneur to look into.

With TAFT and Affiliates, we have AgNexus, which is a fintech and adtech company, taking care of the technological stuff. Then there is Agridemy, a capacity building organization that would look to help develop the capacities of farmers and farmer-based organizations (FBO’s). As well as even the staff within GCX and brokers just so that you know we can work together in coherence or find best practices and I think that U know those kinds of things are very important in building capacity. We’ve got TAFT Commodities too which has an impressive commodities trade resume. And the others.

But I think we can even look at it from the perspective of even revenue generation for the government. Let’s take the farmers for example. One of the things that we’re looking to do is register 350,000 farmers under this project, to deliver goods to GCX. Look at it this way: for every 100 cedis tax paid annually from each farmer, that would be 35 Million Ghana Cedis that comes to add to the government’s kitchen, per every 100 Ghana Cedis tax revenue per farmer. Work the math. That’s a great opportunity for government right there.

The GCX has been audible about their objective to increase farmers’ bargaining power. How are you directly going to help achieve that?

There is strength in numbers. A single broomstick can’t sweep but when you put them all together it’s that added force that allows you to use it to sweep a room or to do the chore. I think in that same way that’s what we seek to do by registering all the farmers.

There’s much greater strength when you give 350,000 farmers a collective voice. Their bargaining and negotiating powers for them to be able to get a fair price for their products gets stronger too and that’s one of our objectives, to give these farmers that voice and to enable them to achieve their long-time objectives, and also increase their income as well.

For GCX, why TAFT Group? For TAFT Group, why GCX?

Answering this question, I have to applaud Dr. Kadri Alfah, who’s the current CEO of GCX. I applaud him because he’s always sought to bring value to the organization and likewise, we do. My first meeting with him, what I found was that if you were just coming to replicate something they had already done, he didn’t see any use in signing you on. That for me was far different from a lot of other organizations that I had met. In Ghana we have a habit of trying to replicate what other people have done rather than being innovative and coming up with solutions and I think that’s why we are a perfect match for them. We bring a host if services to GCX that they don’t have and for us, they create the perfect platform for international exposure. People begin to see Ghana and associate us with world-class International Trade. That can only have great benefits for the country.

Here’s an example. We plan to put in place the structures via GCX that can facilitate and execute forward contracts which would help create the finance that farmers need to be able to grow their crops. A forward contract can then be hedged using options and derivatives. So, when the price drops below a certain price on the world market, the instrument used to hedge it then cushions the transaction, and by extension the farmer. So, the farmer still gets a fair price for his crop and I think those kinds of opportunities are rare.

GCX exchange was on paper for 15 to 20 years and it has just materialized, and I really really think that if we can do this thing properly, if we can make this exchange work to its optimum capacity, the benefits are immense.

[Not all the answers could fit in this article for print. Hit me up for more!]