ECX: Creating A New Ethiopia November 2015
Our dream To build a world class institution signaling Ethiopia’s entry into the modern global market To achieve the “New Ethiopia”, embodying passion, innovation, professionalism, and excellence
Why ECX? 3
Because t here was a problem…. UNRELIABLE SUPPLY HIGH CONTRACT DEFAULT VOLATILE PRICES POOR QUALITY UNRELIABLE TRADING PARTNERS POOR INFORMATION UNREGULATED ACTORS UNCOORDINATED MARKETS HIGH COSTS, HIGH RISKS 4
What was needed.. A Market Solution A more reliable way to connect buyers and sellers An efficient way to discover market prices Transparency: a way to level the playing field by providing market information to all A way to incentivize better quality A way to eliminate contract risk 5
The Core Value Proposition Integrity of Product zero default market Integrity of Integrity of Transaction Actor
The Design Membership based Electronic Warehouse Receipts in warehouses located in rural areas Trading on the basis of standard trading contracts Market data (real time to rural electronic boards, mobile telephones, web) T+1 Clearing and Settlement with partner banks Market surveillance
Integrated ECX Technology Solution REGULATORY BODY MEMBERS AND CLIENTS DATA CENTER MEMBERSHIP MARKET MANAGEMENT SURVEILLANCE RISK MANAGEMENT PRICE TICKERS DATA FEEDS WAREHOUSE GOODS WEBSITE MARKET DATA RECEIVING (QUALITY AND PROCESSING QUANTITY CERTIFICATION) WAREHOUSES CENTRAL CLEARING AND DEPOSITORY OF SETTLEMENT WAREHOUSE RECEIPTS BANKS TRADE ORDER MATCHING AND RECONCILIATION 8
ECX…Reaching for the Stars 9
Since 2008: Growth with Excellence Members: 450 Members, 11,200 clients, 12% farmer cooperative unions- 2.4 million small farmers reached Trading: 2014-15: ~600,000 tons of commodities (coffee, sesame seed, pea beans, maize); US$ 1.5 billion trade value; ~120,000 transactions Warehousing: 17 delivery sites; 55 warehouses; 300,000 MT leased capacity; ~5 million bags/year graded, handled, stored, and delivered
ECX Reach 11
Where We are Today Clearing: 10 partner banks; 2014: ~16,000 Pay-in transactions from buyers and ~30,000 Pay-out transactions to sellers/year, settled by 11 am next day Market data: Real and discrete time, push and pull technology: Prices transmitted in 2 seconds to 86 rural ticker boards Website - 2 nd most visited after SAFEX; 107 countiries IVR (call-in price update): 1.1 million calls/ month; 61,000 call-ins/day SMS (mobile push out): 256,000 subscribers 12
Powerful Results Zero Payment or Delivery Default Zero Trading Order Error Zero System Down 13
Signs of Transformation Improved quality better quality coming to the market; tripling of volume of top 3 grades of coffee in 18 months Market transparency empowerment of small actors, convergence of local and national price, farmer share of final price up from 38% to 65% Market inclusion small actors access to national market Informal to formal consolidation of small trading businesses
Recognition 15
Visibility on global platform 18 African high level delegations 3 Asian delegations 3 heads of state heads of WTO, World Bank, US State Dept, EU Commission, and many others building markets, transforming lives
17 Influence: Camp David G8 in 2012 building markets, transforming lives
The Future is Now 18
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