REMARKS BY MUSIKA MANAGING DIRECTOR, MR REUBEN BANDA, DURING THE LAUNCH OF THE ZAMBIAN COMMODITY EXCHANGE (ZAMACE) SERVICES HELD ON TUESDAY 15TH DECEMBER, 2015.

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-       THE HONOURABLE MINISTER OF AGRICULTURE, HON. GIVEN LUBINDA MP

-       THE ACTING CHAIRMAN FOR ZAMACE, MR LLOYD CHINGAMBO

-       THE VICE-CHAIRMAN FOR MUSIKA, MR DANN GRIFFITHS

-       DIRECTOR OF COMMODITIES AT THE JOHANNESBURG STOCK EXCHANGE, MR CHRIS STURGESS

-       REPRESENTATIVES OF PARTNER ORGANISATIONS INCLUDING THOSE FROM THE PRIVATE SECTOR

-       DISTINGUISHED INVITED GUESTS,

-       MEMBERS OF THE PRESS

-       ALLOW ME TO SIMPLY SAY, ‘ALL PROTOCOLS OBSERVED’

HON MINISTER, LADIES AND GENTLEMEN,

TODAYS’ MOMENTOUS OCCASION AT WHICH WE ARE WITNESSING THE COMMENCEMENT OF PROVISION OF A RANGE OF SERVICES BEING OFFERED BY THE ZAMBIAN COMMODITY EXCHANGE (ZAMACE), IS A MAJOR MILESTONE THAT SIGNIFIES THE FULL OPERATIONALISATION OF A WAREHOUSING CERTIFICATION AND RECIEPT SYSTEM.

IT HAS TAKEN CLOSE TO EIGHT YEARS SINCE ZAMACE WAS CREATED IN 2007 AND STARTED, IN A SMALL WAY, THE PROCESS OF CERTIFYING WAREHOUSES FOR THIRD PARTY STORAGE, TO COLLECTIVELY MOVE THIS PROCESS TO THIS STAGE. I THEREFORE WISH TO CONGRATULATE YOU ALL FOR THIS GREAT ACHIEVEMENT!

LADIES AND GENTLEMEN,

SINCE COMMENCING OUR OPERATIONS IN NOVEMBER 2011, MUSIKA HAS RELENTLESSLY PURSUED THE ESTABLISHMENT OF THE WAREHOUSE RECEIPT SYSTEM AND CONTINUES TO PLAY AN INFLUENTIAL ROLE IN THE DEVELOPMENT OF THE PARTNERSHIPS BETWEEN ZAMACE AND OTHER PARTNERS, AND THE FUTURE PARTNERSHIP BETWEEN ZAMACE AND THE JOHANNESBURG STOCK EXCHANGE.

THE WAREHOUSE RECEIPT SYSTEM WILL ENHANCE MARKET ACCESS, LIQUIDITY, AND CREDIBILITY IN THE COMMODITIES MARKET IN GENERAL, AND MORE IMPORTANTLY FOR MUSIKA, IT PROVIDES AN OPPORTUNITY TO GROW THE SMALLHOLDER COMMODITIES MARKET.

OVER THE PAST TWO YEARS, MUSIKA HAS PROVIDED TECHNICAL ASSISTANCE AND FINANCIAL SUPPORT TO THE TUNE OF $249,700 TO MAINTAIN ZAMACE OPERATIONS AND HAS ALSO PROVIDED TECHNICAL SUPPORT TO ZNFU AND THE GRAIN TRADERS ASSOCIATION OF ZAMBIA (GTAZ) IN PROMOTING GREATER PRIVATE SECTOR PARTICIPATION IN GRAIN MARKETS, PARTICULARLY IN RELATION TO SMALLHOLDER TRADE.

OUR SUPPORT TO THE DEVELOPMENT OF A MORE INCLUSIVE COMMODITIES MARKET CREATES AN OPPORTUNITY TO LEVERAGE PRIVATE SECTOR RESOURCES TO BRING THE SMALLHOLDER INTO A WELL-FUNCTIONING, GROWING AND SUSTAINABLE AGRICULTURAL ECONOMY.

NOW THAT THIS SYSTEM IS FULLY OPERATIONAL THE WAREHOUSE RECEIPTS CAN BE USED FOR FINANCING, OR FOR TRADING - EITHER ON THE DELIVERY OF PHYSICAL STOCK ACROSS A RE-ESTABLISHED ZAMACE OR AS THE UNDERLYING ASSET FOR A FUTURES CONTRACT ON THE JOHANNESBURG STOCK EXCHANGE BY WHICH PRICE RISK CAN BE REMOVED FROM FUTURE TRADE.

BENEFITS THAT WILL ACCRUE TO THE SMALLHOLDERS UTILISING THE WAREHOUSE RECEIPT SYSTEM INCLUDES, AMONG OTHERS, REDUCTION IN POST HARVEST LOSSES; PROVISION OF PRICE INFORMATION THROUGH LUSE AND ZAMACE, AND AN OPPORTUNITY TO ACCESS FINANCE AGAINST STORED CROP WITHOUT PRESSURE TO SELL AT TIME OF HARVEST. SO FAR, SEVERAL FINANCIAL INSTITUTIONS LIKE FIRST NATIONAL BANK ARE READY TO IMMEDIATELY START LENDING AGAINST WAREHOUSE RECIEPTS.

LADIES AND GENTLEMEN,

AS A NON-PROFIT MAKING COMPANY ESTABLISHED TO STIMULATE AND SUPPORT PRIVATE SECTOR INVESTMENT IN THE SMALLHOLDER AND RURAL MARKET, ONE OF OUR GOALS IS TO ACHIEVE AN IMPROVED FUNCTIONING OF AGRICULTURAL COMMODITY (‘OUTPUT’) MARKETS, AIMING TO BENEFIT OVER 95,000 SMALLHOLDER FARMERS BY 2016. WITH THE SUPPORT OF OUR FUNDERS - THE EMBASSY OF SWEDEN AND THE UK GOVERNMENT IN ZAMBIA – AND HAVING THE RIGHT PARTNERS ON BOARD WHICH INCLUDES KEY STAKEHOLDERS REPRESENTED HERE TODAY, WE BELIEVE THIS IS POSSIBLE.

WE WISH TO APPRECIATE GOVERNMENT’S KEY ROLE IN IMPLEMENTING THE CREDITS ACT. AS MUSIKA WE BELIEVE THAT THE ESTABLISHMENT OF THE WAREHOUSE RECEIPT SYSTEM COUPLED WITH A MORE PREDICTABLE AND MARKET-FRIENDLY POLICY ENVIRONMENT CAN PROMOTE A ‘VIRTUOUS CYCLE’ OF GROWTH WHICH INCLUDES GREATER PRICE PREDICTABILITY, MORE EQUITABLE TRADE,INCENTIVES FOR INCREASING CROP PRODUCTION, MORE CROP PLACED IN STORAGE, AND A REDUCTION IN SEASONAL PRICE VOLATILITY.

WE WELCOME THE PROGRESSIVE MOVE BY THE MINISTRY OF AGRICULTURE TO INITIATE THESE MARKET REFORMS, AND WISH TO ASSURE THE MINISTRY, AND ALL STAKEHOLDERS, THAT MUSIKA WILL CONTINUE TO PROVIDE BOTH TECHNICAL ASSISTANCE AND FINANCIAL SUPPORT TO THE ESTABLISHMENT OF ZAMBIA’S WAREHOUSE RECEIPT SYSTEM IN THE COMING YEARS.

WE LOOK FORWARD TO WORKING WITH ALL STAKEHOLDERS TO ADVANCE TRANSPARENCY, PRICE DISCOVERY AND SECURITY IN THE ZAMBIAN COMMODITIES MARKET WHICH WILL BENEFIT ALL MARKET PLAYERS – AND TO LARGER EXTENT- SMALLHOLDER PRODUCERS COUNTRYWIDE.

I THANK YOU!