Okonjo-Iweala adds to a fast-growing list of celebrities, including rock star Bob Geldof and World Bank President Robert Zoellick, who have opened trading here and who have been told some of the many amazing success stories that are now part of this exchange.
A billboard outside the main entrance to trading floor of the exchange situated in the heart of downtown Addis Ababa summaries the story. Its message: "1,000 days, 1 billion USD, 0 default" - please read: "One thousand days of trading, one billion US dollars in trade deals, zero default on payments."
Hidden behind that slogan are the actual success stories of many farmers and traders, some of whom met with Okonjo-Iweala during her visit, including Gadisa Abera of Jemo General Trading.
"The exchange promotes and sells our products to a worldwide market," he told the World Bank Managing Director. "It has markedly improved my bottom line. Two and half years ago when we first started trading here, we sold our coffee for 380 Ethiopian Birr. Last year, we sold the same quantity and quality of coffee for 1,000 Ethiopian Birr."
Abeba Asmare was an unemployed young lady only a few years ago. The exchange unleashed her entrepreneurial genius. She founded Akrabi Company and now employs 80 people, buying and selling food from her native Humera.
Siraj Kedir of Cabey General Trading has been exporting coffee for 12 years, trading tiny volumes - no more than 3,000 tons at his peak four years ago - sold exclusively to bigger exporters based in Addis Ababa . "The exchange has taught me how to trade in a modern way," he told Okonjo-Iweala. "Last year, I exported 9,000 tons of coffee to the USA, Asia, and Saudi Arabia to buyers who have more confidence in the value of our products because they are certified by the exchange."
The CEO of the exchange, Eleni Gabre-Madhin, told the one story she believes most remarkably portrays resistance to the innovative approach the exchange represents, and points to the enormous potential it holds in spreading prosperity to both farmers and traders.
She approached the fourth largest exporter of coffee from Ethiopia soon after the exchange launched and invited him to buy membership, then priced at a mere 50,000 Birr. The exporter's response was a polite "No, thank you," every time Gabre-Madhin contacted him. But she was persistent in offering him membership and after a year it finally paid off.
A year after joining and having risen to Ethiopia's top coffee exporter with sales of $30 million dollars that year, the unnamed trader "had tears in his eyes," according to Gabre-Madhin, when he confessed he would have willingly paid 10 million Birr to buy into membership of the exchange. The same exporter who had declined membership at 50,000 Birr paid 3.3 million Birr at an auction to gain membership.
Founded as a not-for-profit public-private partnership on a demutualized system - ensuring separation of ownership, membership and management - the exchange's initial capital of $9.2 million was contributed by the World Bank, the United States Agency for International Development (USAID) the Canadian International Development Agency (CIDA) , and the World Food Program as well as a grant co-financing of 10 percent contributed by the Government of Ethiopia.
"We launched with 100 founding members and 60 seats, only 12 of which were willing to trade at the start," Gabre-Madhin recalls. Trading members now number 250 - with thousands knocking on the door - and the exchange's full paid-in capital injection is a robust $29 million.
Thanks to the exchange, farmers across Ethiopia receive information in real time on commodity prices. The price of coffee or maize stroke at the exchange in Addis is communicated to farmers within two minutes of a deal being made. The market data feeds directly to farmers via electronic display boards in 31 centers spread across Ethiopia as well as on the exchange's website.
In addition, information on pricing is accessible via automatic telephone messaging. On average, 20,000 calls are made daily via a toll free number established by the exchange to provide market data in four languages. Gabre-Madhin says the number of calls is four times higher than the average 5,000 made daily to the much older Kenyan exchange established eight years ago. Market data is provided via text messaging to interested mobile phone users, ultimately helping farmers avoid unscrupulous traders out to rip them off.
Thanks to the exchange, coffee or any other product is sold as delivered in the farmer's home town - resolving the issues of transport for all farmers who can reach 60 delivery sites operated by the exchange across the country. Payment to farmers, even for those in the most remote parts of Ethiopia, happens within 24 hours of sale - at 3 p.m. the next day - or 10 a.m. the next day, for farmers located in peri-urban areas served by the seven "corresponding commercial banks" with which the exchange now works. Warehouse receipts provided by the exchange now make trade financing easily available to traders thanks to funding from the International Finance Corporation, the World Bank's private sector arm.
With success explained in words so sweet, Okonjo-Iweala pushed for what may be missing. "Do you feel limited?" she asked Gabre-Madhin.
Her answer catalogued a litany of the problems that could have caused many to discourage but did not prevent those working with her to launch the exchange from forging ahead. Ensuring rapid payment to farmers would have worked better if Ethiopia had a national payment system. Setting global industry standards for quality often by overlooking national standards; setting up the appropriate laboratories for certification of the product; convincing farmers to respect standard bagging; all meant working around the system and around problems, Gabre-Madhin explained. It was tough, but it was done.
The binding constraints she feels the exchange continues to face and on which reform could boost the exchange's bottom line and spread prosperity to Ethiopian farmers are threefold: ensuring that the financial and banking sector in the country makes finance work for the poor farmer; expanding access to broadband internet, 3G networks and other database services; and resolving any outstanding issues on the legal framework.
Commodity exchanges similar to or better than Ethiopia's are in the works. According to Gabre-Madhin, who is also the president of the African Commodities Exchange, 13 African countries are either in the process of establishing or designing similar exchanges.
"What would it take for this exchange to be a regional platform?" asked Okonjo-Iweala as her visit drew to a close, clearly unable to hide her excitement.
"Given the many hurdles that are bound to arise when it comes to harmonizing markets across countries, it would be easier to link to national platforms," said Gabre-Madhin.
Less than three years after it was launched, the Ethiopian Commodities Exchange has clearly revolutionized the way trading in farm goods will be done in this country and, as it is now increasingly clear, elsewhere across Africa.
A day after Okonjo-Iweala visited, a World Bank mission led by the Director of Financial and Private Sector Development in the Africa Region of the Bank Marilou Uy arrived Addis Ababa for talks with CEO Gabre-Madhin on how to replicate this promising project in interested African countries.