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Developing an organized commodity exchange in Ghana: Challenges and economic prospects

Author

Listed:
  • Mohammed Iddrisu Ngmenipuo

    (Wa Polytechnic Business School)

  • Osman Issah

    (University for Development Studies School of Business and Law)

Abstract

We have examined challenges and economic prospects of establishing an organized Commodity Exchange in Ghana. We find that such a market will result in reduction in post-harvest losses through price stability, improvement in commodity price risk and credit risk management, provision of a transparent and competitive price discovery mechanism, reduction in transaction and marketing costs, and avoidance of making the mistakes of others. However, we also identify the challenges that should be resolved such as lack of laws and regulations specifically pertaining to the commodity exchange; inadequate financial support; lack of trading infrastructure; inadequate volume; liquidity problem; smallholder farms; lack of understanding of trading instruments; and government/political interference to this end. Overall policy implications suggest inadequate infrastructure and capacity building of market participants should be enhanced.

Suggested Citation

  • Mohammed Iddrisu Ngmenipuo & Osman Issah, 2015. "Developing an organized commodity exchange in Ghana: Challenges and economic prospects," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 3(2), pages 41-54, April.
    • Handle: RePEc:lrc:lareco:v:3:y:2015:i:2:p:41-54
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    More about this item

    Keywords

    Commodity exchange; Price discovery; Price risk management; Warehouse receipt system.;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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