AfricaLive: What was your motivation to take up the position of CEO at the Ghana Commodity Exchange, and how does it align with the identity of the institution?
Tucci Ivowi: My transition into the company was made easy by my experience working for Nestle. Nestle is a fantastic company that I will always vouch for because of their stringent measures in assuring quality and sustainability. Being Ghanaian but brought up, educated and trained in the UK, I always retained an interest in Ghana and for many years have been keen to participate in the building of the Ghanaian economy. After a visit to Ghana in 2002 which exposed me to the positive developments taking place in the country, I was convinced to stay and contribute my quota.
I was part of the conversations being had by top government officials in line with the President’s vision of setting up a commodities exchange. I was then formally consulted to help because of my background at Nestle, having worked in the coffee and cocoa markets. When the decision was made to establish a commodities exchange in 2018, I was ready to step in and play a role.
AfricaLive: What role does your institution play within Ghana and the rest of the region?
Tucci Ivowi: Like any exchange, the Ghana Commodity Exchange (GCX) is a marketplace that brings buyers and sellers together to exchange goods. We decided to start with agricultural commodities, but we are not limited to just those. The decision was made in line with the government’s immediate focus on agribusiness. There is a need for our country to realise its full agricultural potential before we can build a fully industrialised nation. We operate just like a stock exchange, except instead of stocks, we facilitate the trade of agricultural commodities via an electronic trading system. GCX has warehouses where commodities are stored before they are traded so that we can ensure high quality.
Our model protects against the effects of poor post-harvest management where crops deteriorate and end up losing the farmers a lot of money. Commodities are treated in our warehouses to reduce the chances of post-harvest losses. We have the commodities standardised into grades for buyers to choose from. Buyers are, therefore, very clear about the quality they are buying when they decide to go for a grade “1” or “4”, for example. GCX also takes good care of sellers by guaranteeing payment. We have instituted a T plus one model of payment which ensures that sellers are paid within twenty-four hours after delivery.
We are advancing admirably for a relatively new organisation. We’ve engaged in creating awareness and educating people about the goods and services we offer. Though the pandemic has slowed down our activities, we are still making moves to establish ourselves in the market. We have received very positive feedback so far from smallholder farmers expressing their satisfaction with our services. The fact that we are regulated by the Securities and Exchange Commission (SEC) of Ghana also gives people a lot of confidence
AfricaLive: The launch of the African Continental Free Trade Area will be going ahead in early 2021, hopefully acting as a catalyst for driving Intra-African trade. What are your ambitions, both in the short term and long term, when it comes to trading internationally?
Tucci Ivowi: Our first focus is our regional neighbours. There is a lot of cross border trading already taking place on a very informal basis. Countries like Burkina Faso, Mali and Niger are trading with Ghana on commodities like maize. As much as we want to organise and structure the market for Ghana, we aim to do the same for these landlocked countries. We will then move to serve other countries within the wider sub-region. Talks are already underway with players in these other countries, and we have a few potential members from this group. For regional trade to work within our platform, we have to study each country’s regulatory system and work on harmonisation.
We work to ensure that our standards meet what’s required internationally and that the Ghana Standards Authority approves that standard. GCX is not limited to Africa; we have had some interest from Vietnam for cashew, that we appreciate. We certainly have a plan to attract those within the sub-region, the entire continent, and eventually the rest of the world. We created the system in modular fashion, starting with spot trading, with a plan to add forwards and then much later futures contracts.
AfricaLive: Within Ghana and West Africa, what do you consider to be the primary opportunities and threats facing your sector?
Tucci Ivowi: Launching a commodity exchange in Ghana essentially meant launching a system which had never existed before. Such a move would come with challenges anywhere in the world. There will be some who are resistant to change and don’t see the need for such a platform. Regarding the sub-region, each country also has its own plans and ambitions. We can, however, benefit from the fact that West African countries are all firmly focused on improving their agricultural sectors.
The onus is on us as individual countries to form synergies that will see us achieve our individual and collective goals. The foreseeable problem amongst countries when it comes to proprietorship, is the need for ownership and self-preservation but that shouldn’t deter us from the overall goal.
Perceptions are changing, new habits are forming, and people appreciate the role technology through the exchange is playing in agribusiness. Farmers are thrilled by the fast payments, and those who aren’t comfortable using the technology (electronic trading system) are co-opting their children to be floor trading representatives for them. This is a clear example of attracting youth into agribusiness. Finally, opportunities exist for creating partnerships, but they must be constructed in a way that adds value to all parties involved.
AfricaLive: The exchange is clearly a bridge between the public sector and other stakeholders within the industry. How do you go about building trust and ensuring all participants are satisfied?
Tucci Ivowi: The Exchange plays the role of a central counterparty against risk. Any commodities stored in GCX warehouses are under insurance, and we also have performance bonds on the commodities. If there is any degradation in quality, the performance bonds will be drawn upon. This model ensures that no buyer gets quality that does not match what they ordered. Our model is one of inherent trust, and the fact that we are bound by rules guarded by the regulator offers adequate security to all involved. It’s also encouraging to many that the government is heavily involved.
Though we started as an institution wholly owned by the government, there are plans to open ourselves up to private sector investment. The government has plans of funding the agency until we break even to ensure that the interests of smallholders are preserved. Our priority is social good first, and that should signal trust among all the actors and the general public.
AfricaLive: Having worked abroad for many years, what do you think Ghanaian businesses can learn from the UK and vice-versa?
Tucci Ivowi: There is a bit more time consciousness and ruthlessness abroad than here. It teaches you to have patience and an understanding of different cultures. There is a very admirable communal culture that here, others can learn from, and we can learn business ethics and time-consciousness from cultures abroad. It’s about learning from others and applying what works in your system to strengthen yourself.
AfricaLive: What would be your message of confidence and outlook for the exchange in the next decade?
Tucci Ivowi: The exchange is a vehicle that seeks to promote and assist trade across the world. We’ve already been approached by international organisations that see our potential impact not only in Ghana but also in many other jurisdictions.