The Word Bank Group has thrown its full weight behind the successful implementation of the soon to come agriculture commodities exchange — the Zimbabwe Mercantile Exchange (ZMX).
Through its International Finance Corporation, the Group is implementing the Warehouse Receipt System (WRS), which anchors the successful implementation of the commodities exchange.
In line with this, the World Bank Group is offering technical support, as part of the development partners for the ZMX.
“As part of the delivery of the WRS project we are providing technical support to FINSEC,” said project leader with the World Bank Augustine Sangson Langyintuo by email.
The ZMX is a partnership between Government and the private sector led by FINSEC, TSL Limited and CBZ Holdings. FINSEC, a subsidiary of Escrow Group is undertaking the technical implementation work in setting up the exchange.
The World Bank Group has also engaged an international consultant to review processes, rules and documentation with regards the operations of the exchange.
The exchange was initially scheduled to launch end of March but postponed to end of this month.
“An international consultant was hired to provide the following services to FINSEC towards and launch and operationalisation of the exchange (such as) appraise the operationalisation of an exchange including risk assessment and mitigation; “Review of FINSEC’s processes, procedures, rules and various documentation pertaining to the operations of the exchange; and building the capacities of FINSEC operational staff on the management of commodity exchange and trading platform,” he said.
According to the World Bank Group, the hired service providers are paid directly by the international financial institution.
As efforts to launch intensify, the World Bank Group also hired experts to come up with the ZMX’s corporate identity as well as promotional material and awareness campaigns.
Plans are under way for extensive awareness creation among stakeholders, especially farmers on the warehouse receipts systems and mercantile exchange.
Locally, the Grain Marketing Board (GMB) is one of the key strategic partners for the ZMX, that will provide warehouses together with TSL Limited, Origen as well as ETG and discussions are also under way with other private players with warehouses that can be used for the initiative.
This will address one of the challenges that farmers face, especially small scale that is post harvest losses due to lack of proper storage facilities.
With the (WRS) farmers are guaranteed of good storage facilities for their commodities although they will bear the cost of storage as well as transportation to the warehouses.
Further assistance in research and policy formulation was drawn from the Food and Agricultural Organisation (FAO) and Indaba Agricultural Policy Research Institute (IAPRI) for technical assistance centred around how small holder farmers can participate in the mainstream economy.
Among other milestones towards launching, the ZMX finalised on-boarding of participants on the platform, for instance custodian and settlement banks, farmers, warehouse receipt financiers, commodity off takers and end users, regulators, quality inspectors and warehouses among others have been on-boarded.