Dr. Eleni Gabre-Madhin has reformed the economy of Ethiopia through the Ethiopia Commodity Exchange, the first commodity exchange in Africa. Whereas the approach to solve hunger problems throughout Africa in the past has been to focus on food production, Gabre-Madhin came to the conclusion that the true cause for shortages lay in distribution, something the Exchange is set to fix. In an interview with AllAfrica, Gabre-Madhin shares her take on the matter.
“I had been doing research on grain markets and other agriculture markets in Africa for many years,” said Gabre-Madhin, “and as it happened I did my Ph.D. on grain markets in Ethiopia. One of things that I kept seeing over and over, which I’d seen in other parts of Africa, was just how difficult it was for buyers to find sellers and sellers to find buyers and how difficult it was to enforce the contract…these are all the problems in the supply chain that make us poor and make us food insecure. If people can’t get grain where it’s produced really efficiently to where it’s needed, then you have markets that are segmented. You have pockets of surplus where prices collapse and places in other parts of the county where prices shoot up because there’s a deficit and there’s no grain coming in…When I found out as a student about this situation of the 1984 famine, I said, ‘It can’t just be about producing more – sure producing more is important but we’ve got to figure out how to distribute it. We’ve got to figure out how to make an efficient market work for everybody – for the farmers, for the buyers, because otherwise we’re always going to be in this cycle’.”
This approach has so far dramatically improved economic conditions within Ethiopia and has consequently attracted the attention of other countries in Africa. In fact, Gabre-Madhin plans to share the success of her enterprise with other governments, traveling to educate them on how to develop their own exchanges.
To read more about the success and future growth of Africa’s first commodity exchange, follow the link below: