Speaking in a speech read for her by finance minister Dr. Bwalya Ng’andu at the launch of the LUSE Commodities Market at Radisson Hotel in Lusaka on Wednesday, Vice-President Wina said using the warehouse receipt as collateral through the commodity market initiative will provide farmers with “some” leverage to access various forms of finance such as a bank loan.
She said the agriculture sector continues to be one of the priority drivers of the country’s economy, adding that the government is happy to be part of the strategic move by the Lusaka Securities Exchange (LUSE) and its cooperating partners.
“I am greatly honoured and privileged to officiate at this morning’s launch of the commodities market. This is a joint effort between the Lusaka Securities Exchange (LUSE) and the Zambia Commodity Exchange (ZAMACE) in conjunction with the Musika Initiatives Zambia. This development is particularly significant in view of the fact that the agricultural sector continues to be one of the priority drivers of the Zambian economy. Accordingly, the government is committed to supporting various initiatives, such as this one which are aimed at growing this sector. It is also encouraging to note that this initiative is being driven by the private sector with a view of contributing to the resilience of our economy. As we work towards achieving greater diversification of this economy government will continue to value partnerships between itself and the private sector as well as partnerships among private sector players themselves as exemplified by the partnership between LUSE and ZAMACE in the development the commodities market,” Vice-President Wina said.
She said the commodities market has the potential to contribute to enhanced agricultural production that will respond to increased demand for food occasioned by rapid population growth.
“The government is aware of some of the challenges being faced by the small scale farmers and SMEs in accessing finance is due to lack of certifiable collateral. Using the warehouse receipt as collateral through the commodity market initiative will provide farmers with some leverage to access various forms of finance such as a bank loan. The warehouse receipts can be traded over various financial institutions including LUSE will provide a structured, transparent and efficient mechanism to drive trade withinZambia and abroad. This is what underscores the significance of today’s launch. Government is delighted to note that the small scale farmers and SMEs in particular will be the major beneficiaries of this market initiative as they will be able to store their agricultural produce in a certified warehouse and receive a warehouse receipt which can be sold over the exchange or to a financial institution,” she said. “In addition, the warehouse receipt system is also an opportunity for financial institutions to provide the much needed solutions for grain marketing and to create innovative instruments in conjunction with the LUSE for secondary trading. I would, therefore, like to implore all the financial institutions to engage LUSE and recommend measures and financial products for a robust commodities market specifically in the production and marketing of agricultural commodities through the LUSE-ZAMACE partnership.”
Vice-President Wina hoped the commodities markets will contribute to the promotion of diversified and export-oriented agriculture sector by enhancing agriculture value chains, improved finance for production and exports, and promotion of small scale agriculture.
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