The Ivory Coast is transforming its agricultural sector with the BMPA-CI, a new commodities exchange aimed at enhancing economic growth, ensuring fair pricing, and empowering farmers.
In an ambitious move to boost its economy, the Ivory Coast has introduced the BMPA-CI, a pioneering agricultural commodities exchange. This initiative is set to modernize the agricultural landscape, providing a structured and fair market for key crops and offering significant economic benefits to farmers and processors.
Economic significance
Agriculture is a cornerstone of the Ivory Coast’s economy, employing a substantial portion of the population and contributing to both GDP and export earnings. The BMPA-CI seeks to amplify this impact by optimizing the agricultural value chain, ensuring that farmers receive appropriate compensation for their crops and thus promoting economic stability within the sector.
Speaking at the recent BRVM Investor Roadshow at the Johannesburg Stock Exchange (JSE), Rémi Burdairon, the principal at Atria Trade Investments, highlighted the fact that of the 250 pence it costs a customer for a cup of coffee in London, the coffee farmer only gets 1 pence.
Focused commodities trading
The BMPA-CI initially targets three primary crops: cashew nuts, maize, and kola nuts—crops in which the Ivory Coast holds global leadership in production. The inclusion of these commodities in the exchange is strategic, designed to leverage the country’s strengths to enhance market efficiency and profitability for local farmers.
Ivory Coast’s Minister of Agriculture, Rural Development and Food Crop Production, Kobenan Kouassi Adjoumani said, “Some people have said that moving to a futures market for agricultural commodities is too ambitious for our small farmer sector, but I disagree.”
Embracing technology for growth
Reflecting on the transformative impact of mobile money in rural financial access, Minister Adjoumani highlighted the potential for similar technological integration within the BMPA-CI. This approach is expected to foster a rapid growth trajectory for the exchange, much like the revolution seen in digital financial services.
Infrastructure development needs
However, the exchange faces significant infrastructural demands, with estimated investment needs surpassing €3 billion for adequate storage and logistics facilities. Drawing parallels with South Africa’s SAFEX, which thrived due to pre-existing infrastructure, the BMPA-CI’s success will largely depend on the development of similar foundational facilities.
Policy and regulatory framework
For the BMPA-CI to flourish, a stable and supportive regulatory environment is crucial. Minimal government interference, consistent policies, and supportive measures are essential to foster an efficient market that can sustainably support the nation’s agricultural backbone, according to many in the industry.
During the recent Roadshow, Agri All Africa CEO Dirk Hanekom, representing 4,500 farmers in 45 African countries, claimed that what farmers required was regulatory and policy consistency. Burnt Orange Trading director Chris Sturgess noted that exchanges worked best when there was minimal government intervention, and claimed that policies such as export bans on commodities would kill off exchanges.
In summary, the introduction of the BMPA-CI marks a major step forward for the Ivory Coast’s agricultural sector. By aligning market operations with international best practices, the exchange is poised to transform agricultural trade in the region, ensuring fair pricing and economic empowerment for farmers, and setting a precedent for market-based agricultural reforms in West Africa.
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