News / Africa

    Africans Debate Private vs. State-Run Commodity Markets

    Ethiopian traders work on the floor of the Ethiopian Commodity Exchange (ECX) in the capital Addis Ababa. (File Photo)
    Ethiopian traders work on the floor of the Ethiopian Commodity Exchange (ECX) in the capital Addis Ababa. (File Photo)

    A conference on African commodity exchanges has revealed a sharp difference of opinion on the role of government in establishing and regulating markets. Many African countries are choosing to leave commodities markets to the private sector, while others are keeping the lead role for the State.

    Ethiopia's state-owned commodity exchange, the ECX is being held up as a model this week as hundreds of bankers, businessmen and government officials discuss bringing prosperity to Africa's farmers. But many other African countries disagree with the concept of states controlling the market.

    At a panel discussion examining the state's role in market creation, Ghana's deputy minister of trade and industry Joseph Annan says his government follows a hands-off policy.

    "We discovered in Ghana long ago that government has no business doing business," said Annan.

    Ethiopia's top government economist, however, says every country is different when it comes to economic policy. In Ethiopia, where farmers are among the poorest in Africa, economist Newai Gebre Ab says the success of the ECX is the result of careful state planning.

    "ECX is not an accident, it is the outcome of a long-term development strategy which is known as Agricultural Development-led Industrialization," said Newai Gebre Ab. "It is a strategy that the government follows, and it's meant to extend over decades."  

    Newai, the chief economic adviser to Prime Minister Meles Zenawi, says state ownership of the exchange prevents inefficiencies common in private sector markets.

    "ECX is meant to provide an efficient market system that delivers price incentives to the producers, and a price mechanism that is transparent, and would also efficiently provide goods and products to the consumers," added Newai.

    The concept of a state-controlled commodity exchange rankled free market advocates in the audience, who say the private sector could do a better job of maximizing farmers' profits. Maurice Ewing, chief risk officer at Kenya's Equity Bank, stood up to argue that government control is like a cage built to capture the elusive bird that is economic prosperity.

    "If you build the cage before you have the bird, how are you going to go anywhere? Where will you see it fly? How can you even test? Give incentives! To me, all I hear is language that says, we want to get it to a point so we can tax it," said Ewing. "So we can have revenue, so somehow we can plan to distribute it to the poor."

    Newai Gebre Ab countered that Ethiopia's state plan envisions strong  private sector involvement.

    "There will be plenty of opportunities for the private sector to come in, to contribute, to lead and to get engaged," said Newai. "There is no cage here. The bird can fly in and fly out anytime it wishes to."

    Panel moderator Tumi Makgabo of South Africa summed up the discussion saying, "The bottom line is, government should stick to government's business, and let business do business". It is a conclusion with which many in the hall would take issue.

    The conference wraps up Wednesday with a look at the future, as Africa's traditionally poor farmers seek the wonders of modern technology to help them achieve the promise of prosperity.

    You May Like

    Clinton, Trump and the 'Woman’s Card'

    Ask supporters of Democratic front-runner in US presidential campaign, and they’ll tell you Republican presidential candidate is playing a dangerous hand

    Russian Censorship Group Seeks Chinese Help to Better Control Internet

    At recent Safe Internet League forum in Moscow, speakers from both nations underscored desire for authorities to further limit and control information online

    Video Makeshift Pakistani School Helps Slum Kids

    Free classes in Islamabad park serve a few of the country’s nearly 25 million out-of-school youths; NGO cites ‘education crisis’

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Turkish Kurd Islamist Rally Stokes Tensionsi
    X
    April 29, 2016 12:28 AM
    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Turkish Kurd Islamist Rally Stokes Tensions

    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.

    Special Report

    Adrift The Invisible African Diaspora