Commodities exchange gets US$1.8 million boost

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Harare (New Ziana) – At least US$1.8 million will be injected as capital investment into the Zimbabwe Commodities Exchange by its four shareholders who include the government, which holds a 20 percent stake, to get it off the ground, a Cabinet Minister has said.

The shareholding structure approved by Cabinet on Tuesday will see the other partners, Financial Securities Exchange (Finsec) holding 22.5 percent, publicly traded agro-industrial business TSL 22.5 percent and CBZ Holdings 35 percent.

The government shareholding is held by the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development.

Finance and Economic Development Minister Professor Mthuli Ncube said the investment would enable the exchange to get off the ground.

“For its stake of 20 percent, the Zimbabwe government will be contributing US$360 000 equivalent. All the parties together will contribute US$1.8 million to capitalise the exchange to get it off the ground in earnest,” he said during the question-and-answer session of Tuesday’s post Cabinet briefing.

One of the advantages of the exchange, he said, would be the use of warehouse receipts as collateral for loans.

“Once a farmer has a warehousing receipt for any grain that he has deposited, that commodity receipt can be used as collateral for any loans going forward, so not only will it impact the price discovery process, it will also improve the contracting arrangement and access to credit for farmers across the board.”

The commodities exchange, which was launched in August last year, is an agricultural commodity trading platform with automated electronic warehousing and receipting capabilities.

It was designed to curb warehousing and price discovery challenges relating to farmed commodities, which local farmers encounter in their operations.

The initiative also seeks to deal with challenges encountered by farmers in the marketing of their agricultural produce, which include limited and often costly logistics, inappropriate or inadequate storage facilities.

The problems resulted in farmers incurring significant post-harvest losses.
New Ziana

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