Ethiopian Commodity Exchange as a Model : for PanAfrican Commodity Exchange and other Emerging Economies

Africa has longed for commodity exchanges since early 1990s. Among such countries in this continent where agricultural commodity exchanges were established in the 1990s are Ghana, Nigeria, South Africa, Nigeria, Uganda, Zambia and Zimbabwe - characterized by seasonal price variability. The Ethiopian Commodity Exchange (ECX, 2008) has been a successful private-public exchange for which other African countries and the whole continent would like to model commodity exchanges for the highly volatile Agricultural sector. Financial and mathematical models are introduced to prevent losses by estimating VaR, a java GUI prepared for the proposed futures and forwards trading for ECX as a risk management tool via hedging and a validation of the tableau platform used at the data analysis department done with R statistical software which gives a more detailed numerical interpretation for critical decisions and investment.