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

Is Air Travel Safe?

Aviation expert says despite tragic losses of Malaysian Airlines flights 370 and 17, industry experienced lowest fatality rate in recorded history last year More

Multimedia 100 Days Later, Nigerian Girls Still Held

Activists holding rallies in Nigeria and several other countries to mark 100th day of captivity for more than 200 schoolgirls being held by Boko Haram More

Chocolate Too Bitter? Swap Sugar for Mushrooms

US food technology company develops fermentation process using mushrooms to reduce bitterness in cocoa beans, believes it will cut sugar content in candy More

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

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Carriers Suspend Travel to Israeli
X
Carolyn Presutti
July 23, 2014 1:21 AM
The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video US Carriers Suspend Travel to Israel

The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video NASA Focuses on Earth-Like Planets

For decades, looking for life elsewhere in the universe meant listening for signals that could be from distant civilizations. But recent breakthroughs in space technology refocused some of that effort toward finding planets that may harbor life, even in its primitive form. VOA’s George Putic reports on a recent panel discussion at NASA’s headquarters, in Washington.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.

AppleAndroid