Ethiopia’s Commodity Exchange (ECX) has reported a significant decline in both trade volume and revenue over the last three fiscal years, spanning 2021 to 2024/25, according to a recent Auditor General’s report. This downturn marks a worrying trend for one of the country’s key agricultural market institutions.
The audit found that trade volume on the ECX plummeted by as much as 51%, with the amount of production traded falling drastically from 42,874 metric tons to 314,446 metric tons. Correspondingly, transaction value dropped between 13% and 30%, with revenue sliding from 11.884 billion birr to 3.712 billion birr.
Over a planned revenue target of 2.06 billion birr spanning three years, ECX managed to collect only 467.5 million birr, resulting in a revenue loss of 22.7%. The report highlighted that this shortfall in income occurred even as the exchange continued to incur substantial fixed expenses, including over 156.9 million birr spent on renting warehouses, offices, and scales.
The findings point to several underlying issues contributing to this poor performance. The absence of regular external audits, with the last comprehensive review dating back to 2018, coupled with neglected internal audit recommendations, weakens the exchange’s accountability and governance. Operational inefficiencies, such as a trading system plagued with frequent disruptions and cancellations, have frustrated members, many of whom reported dissatisfaction with the inability to adjust prices during transactions.
Moreover, the ECX’s limited portfolio, focusing on a narrow range of products stored across a few warehouses in regions like Saris, Adama, Hawassa, Dilla, Jimma, and Bonga, has compounded quality control problems, including inadequate categorization and grading systems. As a result, customers have complained about product and service quality, which has spurred a migration of traders and exporters to competing platforms.
Governance issues are also apparent. The report criticizes the ECX board of directors for failing to meet regularly, undermining efforts to review performance and engage government stakeholders effectively. Combined with ongoing conflicts between the commodity market and the Coffee and Tea Authority, these factors have hindered resolution of critical market problems.
Highlighting product-specific challenges, the report notes enduring issues with key commodities such as green masho and coffee. Attempts to address pricing constraints imposed by government ministries have faltered, leaving unresolved disputes and heightening uncertainty among market participants.
The audit recommends urgent reforms to upgrade existing infrastructure, emphasizing the modernization of warehouses with up-to-date technology to improve product quality and operational efficiency. It also calls for the development of a strategic plan aimed at boosting member participation and restoring ECX’s competitiveness in Ethiopia’s agricultural markets.
