Formal evaluation of the Ghana Commodities Exchange

• Commodities exchanges have become a policy priority for many governments in Sub-Saharan Africa, with the Ethiopian Commodities Exchange setting the stage for other countries to follow. The Ghana Commodities Exchange (GCX) is on its way to becoming fully operational.
• Using multiple data sources, including a mobile phone app developed in a previous IGC project, this study seeks to evaluate the impact of the newly established GCX on the prices and quantities of agricultural goods traded in the country.
• By looking at those products traded ‘inside’ and ‘outside’ the GCX, this study will deepen the empirical understanding of the potential positive and negative impacts of commodity exchanges more generally.

The recent establishment of the Ethiopian Commodities Exchange (ECX) has generated significant interest at the highest levels of policymaking in many Sub-Saharan African countries. After learning about the Ethiopian model, national leaders of countries as diverse as Ghana, Nigeria, Mozambique, and Rwanda have embarked on programs to establish similar exchanges.

Unfortunately, little preparatory work was done before the establishment of the ECX, which has made evaluating its impact difficult. However, the Ghana Commodities Exchange (GCX) is now on its way to becoming fully operational and with it, researchers are putting in place concrete ways to measure how it impacts agricultural markets in the country.

GCX researchers will use multiple methods to evaluate the impacts of the exchange. IGC funding and assistance has helped the GCX establish these evaluation methods. The first way researchers will evaluate the exchange’s impact is through detailed case studies – on-the-ground researchers will be able to see how the exchange changes the structure of agricultural markets. However, to carry out these detailed surveys across the whole country would be costly. Thus, to complement this, researchers will also utilise a mobile phone app, Marketplace, developed in a previous IGC project, to collect data on the prices and quantities of goods from farmers who would otherwise be hard to reach.

This data will not just be useful in improving the GCX as it matures, but be invaluable for other African countries seeking to establish their own commodity exchanges in the near future.