Dr. Eleni Gabre-Madhin, an Ethiopian economist and founder and outgoing CEO of the Ethiopia Commodity Exchange (ECX), is an African woman who saw in need, a powerful opportunity. Using her training as an economist and researcher, she has facilitated Ethiopia’s Green Revolution, putting the country on the map as a food producer.
“In 1984–85, the year of the famine that killed nearly a million Ethiopians, I was an undergraduate at Cornell. At dinner one night, other students started throwing food. And suddenly—shocking myself—I got up on a chair and I screamed, “Stop doing this! In my country people are starving!” In that moment, I knew that I owed my country something.”
Dr. Eleni spent several years as a Senior Sector Economist of the World Bank and also served as an economist and commodity trading expert at the United Nations Conference on Trade and Development(UNCTAD) in Geneva. Despite her years abroad, she remained connected to her home country, closely following the agricultural market. Eleni worked as researcher for the International Food Policy Research Institute (IFPRI) in the United States where she spent many years examining agricultural markets, speaking with traders and observing trends. Like other economists, she noticed massive fluctuations in prices of agricultural products as some years or regions saw severe production shortages while others had bumper harvests. A 2002 survey revealed the lack of infrastructure and services needed for an effective grain market contributed significantly to the fluctuations. Access to credit for traders, information about the market and transportation facilities were either unavailable or ineffective and contracts within the market were rarely honoured.
Speaking at a conference in 2007, Eleni said “African agriculture today is among, or is, the most under-capitalized in the world. Only seven per cent of arable land in Africa is irrigated, compared to 40 per cent in Asia.” She also recognised that price volatility of food crops was the highest in the world and that small farmers in Africa were forced to bear the highest levels of market risk. The effects of undercapitalisation, inadequate market infrastructure and sufficient risk protection for the farmers had far-reaching effects, not just on the farmers’ families but on the entire country. The 2002 famine in Ethiopia was evidence of that Eleni returned to Ethiopia from the US in 2004 to lead an IFPRI programme aimed at improving Ethiopia’s agricultural policies and markets. She dreamt of a market that protects African farmers and firmly believed Ethiopia could be changed from being one of the most food aid-dependent nations to a regional food basket.
On returning to Ethiopia, Eleni worked hard to establish the first ever Ethiopian Commodity Exchange (ECX): a new initiative for Ethiopia and the first of its kind in Africa, a platform that allows trading of agricultural products and other commodities while protecting both farmer and traders from price drops and price hikes respectively. It revolutionizes Ethiopia’s tradition bound agriculture through creating a new marketplace that serves all market actors, from farmers to traders to processors to exporters to consumers. Since its establishment in 2008, the impact of the ECX on the lives of farmers and the agricultural economy has been felt, especially for smallholder coffee producers. For the first time Ethiopian farmers had a trading floor, instead of signing contracts with private brokers, and access to more transparent pricing. It complemented efforts made before her to boost farming yields.
The ECX, owned by the government with more than 350 members and 800 staff, handled more than $1.4 billion worth of 640,000 metric tons of coffee, sesame, white pea beans and a small amount of corn trading through electronic per year. ECX represents the future of Ethiopia, bringing integrity, security, and efficiency to the market. ECX creates opportunities for unparalleled growth in the commodity sector and linked industries, such as transport and logistics, banking and financial services, and others. ECX assures all commodity market players the security they need in the market through providing a secure and reliable End-to-End system for handling, grading, and storing commodities, matching offers and bids for commodity transactions, and a risk-free payment and goods delivery system to settle transactions, while serving all fairly and efficiently. With the right market incentives, Eleni anticipates increased productivity of farmers and greater motivation to innovate in agriculture.
She has an ambition to make custom-fitted exchanges across Africa and other emerging markets. She left the ECX in 2012 and created Eleni LLC. She is trying to transport the idea of building commodity exchanges to other frontier markets. Based in Nairobi, she plans on opening offices in Dubai and Accra, Ghana. She was elected to the board of Syngenta AG, the world’s largest maker of crop chemicals, based in Basel.
Her success has caught the attention of other world leaders, including President Barack Obama. His administration invited her to participate at the Group of Eight Camp David summit on food security. At the meeting table, she sat between U.K. Prime Minister David Cameron and Russian Prime Minister Dmitry Medvedev.
Dr. Eleni said she believes being a woman has added to her success even though she’s never been formally taught by a female economist or found a woman mentor in her field. “We’re talking about changing the power dynamics in a market, transferring power from the most powerful economic actors,” she said. “These are very tough things. And to have a woman who is still feminine, is still gentle, still smiles, presenting those ideas and being very rigorous in the principles and the analysis behind it; I think it is such a contrast that it’s very powerful.”
She looked beyond neoclassical economics by studying a perspective known as new institutional economics, which also considers the legal and social environment in which markets operate. The theory, which incorporates factors such as business management, negotiation costs and ideological stances, was spawned by 1991 Nobel prize-winning economist Ronald Coase. Dr. Eleni’s thesis on the transaction costs of Ethiopia’s grain market won the outstanding dissertation award from the American Agricultural Economics Association in 1999. The paper offered a solution to an ages-old issue in African agrarian societies: how to find markets to distribute crops where they’re needed and plan ahead for food shortages during bumper harvests. It proposed stronger buyer-to-seller connections through the efficiencies of a commodity exchange.
She has received several honours for her work:-
- The Yara Prize 2012 for an African Green Revolution, backed by former United Nations Secretary General Kofi Annan.
- The Ethiopian Person of the Year 2010
- Africa Report’s “50 Women Shaping Africa” 2011
- African Business’ Outstanding Businesswoman of the Year 2010 nominee
- the African Banker Icon Award for 2012.
You can get more information about ECX:- http://www.ecx.com.et/Home.aspx