Technical assistance to the BRVM for the operationalization of the Côte d’Ivoire Agricultural Commodity Exchange

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CONSULTING

CUSTOMER:

Government of Côte d’Ivoire, through the Ministry of Agriculture and Rural Development (MINADER)

Technical assistance provided by the Regional Securities Exchange (Bourse Régionale des Valeurs Mobilières – BRVM)

  • 2019 - 2020

BACKGROUND AND PROBLEM:

As part of the implementation of Phase 2 of the National Agricultural Investment Plan (PNIA 2), the Government of Côte d’Ivoire has decided to create an Agricultural Commodity Exchange (BMPA) which should help revolutionize the agricultural sector by providing a reliable market for agricultural products, boosting production and enabling the agricultural sector to play its full role in the economy by improving rural living conditions and contributing to its economic growth.

Côte d’Ivoire, which development is partly based on the agricultural sector, believes that it is imperative to set up a commodity exchange in order to facilitate the marketing of agricultural products, to better control the market environment, to promote the development of new financing solutions; and to face the current challenges including the fight against the high cost of living, climate change, population growth, food security…

The feasibility study carried out in 2017 has revealed that there is a national and international environment conducive to the development of a successful agricultural commodity exchange in Côte d’Ivoire. The Ministry of Agriculture and Rural Development (MINADER) acting on behalf of the State of Côte d’Ivoire has mandated the Regional Securities Exchange (BRVM) as part of a technical assistance agreement for the conduct of the project to create and operationalize the Agricultural Commodity Exchange (BMPA).

In the implementation process of this technical assistance agreement, the BRVM has recourse to the services of the INSTITUT SOUMARÉ OF FINANCE as an Execution Agency to assist it in the training of the stakeholders, the design of the business plan and then the operationalization of the business plan.

SERVICES PROVIDED:

  1. Training and raising awareness of potential actors. The aim of the training was to train potential market players on the basic concepts of how a commodity exchange works, in order to raise awareness on the importance of such an instrument for financing agriculture and to ensure a common understanding of the project and its operation by all actors in Côte d’Ivoire.
  2. Development of the Business Plan for the future Agricultural Commodity Exchange of Côte d’Ivoire (BMPA CI). The objective was to produce the business plan of the commodity exchange to be created with the consideration of the development and growth of the future exchange, the different market compartments, the products to be introduced on the exchange, the post-trade services, the warehousing services and the optimal functioning of the regulatory authority to be set up.
  3. Advisor to the BRVM project team. The objective of the institutional support was to provide the expertise and technical resources required to support the BRVM throughout the project of setting up the Exchange.
  4. Execution Agency for the effective implementation of the Business Plan of the Commodity Exchange for its official opening. The services covered regulation, trading, post-trade, and warehousing.

RESULTS OBTAINED:

  1. Training of the actors. About 50 training sessions were facilitated by the INSTITUTE, which helped train about 1000 actors from different spheres of the agricultural value chain in Côte d’Ivoire. These training sessions were very popular with the actors, all of whom expressed their complete satisfaction.
  2. Awareness campaign. Regional awareness campaigns were held in the interior of the country in the main cities and the main production, warehousing and processing sites, with the populations of the agricultural business as well as the various stakeholders involved in the different regions of the country potential users of the future commodity exchange to ensure exemplary use of the entities of the future organized commodity market and adequate liquidity within the Exchange.
  3. Institutional support for the creation and operationalization of the Agricultural Commodity Exchange of Côte d’Ivoire. We provide institutional support to the BRVM’s Senior Management and its project team in the preparation of strategic presentation documents and discussions with the government and partners; in operational choices based on international best practices; and to take part in strategic and operational discussions with partners.
  4. Production of the Business Plan. We develop and produce the business plan for the Agricultural Commodity Exchange in Côte d’Ivoire, which served as the foundation and the guide for the commodity exchange model to be adopted, the structures to be created and the architecture to be put in place.
  5. Execution Agency for the implementation of the Business Plan. As part of the services provided in the implementation of the Business Plan, we were able to, among other things: design and implement the key market entities and market players; design and implement the key risk management functions; develop the rule book, the membership rules and the contracts to be negotiated at the Exchange; design and implement the Exchange information system; perform the first quotation and trading tests and simulations.

The results achieved made the Agricultural Commodity Exchange operational, with the first quotation and trading tests and simulations successful. The official opening of the Exchange is expected to take place very soon.

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