Wednesday, February 28, 2024
BusinessECX to overhaul management in response to declining performance

ECX to overhaul management in response to declining performance

The Board Directors of the Ethiopian Commodity Exchange (ECX) have called for management reshuffles due to underperformance. The decision extends to directors, and officers within the Exchange.

Sources close to the Board revealed that the chief executive officer (CEO) and his deputy have received strict instructions to reorganize their subordinates, including transferring select staff from regional offices to the capital.

While the directive primarily focuses on lower-level management changes affecting directors and officers, sources informed The Reporter that “clear instructions were given to ensure that a holistic transformation occurs at the lower levels.”

Under the chairmanship of State Minister for Trade and Regional Integration, Kassahun Gofe, the Board has advocated for organizational changes within the Exchange. The reshuffle primarily targets those involved in warehouse operations and information technology (IT) areas that have faced criticism for maladministration.

“The individuals will receive letters starting October 20, 2023,” the source said.

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As per the Board’s recommendation, high-performing officers from regional branches such as Jimma and Gondar will be transferred to the capital to spearhead the reforms.

CEO of ECX, Wondimagegnehu Negera, confirmed that the Exchange is indeed undergoing a management reshuffle. However, he refrained from providing further details, indicating that the office will disclose information “at the right time.”

Wondimagegnehu emphasized that the reform plan is internal and voluntary, not imposed.

“We underwent a big reshuffle a few years ago; this reform is an ongoing occurrence. Currently, we are in the preliminary stage, and therefore, we will disclose the information ourselves at the appropriate time,” Wondimagegnehu said.

The Board’s primary objective is to revitalize the Exchange, which has faced criticism for failing to meet expectations. The Board has been pushing for a restructuring, with numerous complaints from traders and clashes with regional administrations, according to the source.

“Some officers and directors have been here since the inception, without upgrading their way of conducting business,” says the source.

ECX, once the country’s leading trading platform for commodities, has encountered challenges due to market changes, including vertical integration, driven mainly by the Ethiopian Coffee and Tea Authority.

Traders now have alternatives such as contract and investment farming, forward contracts, and vertical integration, causing ECX to struggle to compete with market reforms.

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Video from Enat Bank Youtube Channel.

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