ECX Appoints Former Zemen Bank VP as CEO

The Ethiopian Commodity Exchange (ECX) has appointed Ermias Eshatu, vice president of Zemen Bank, as its Chief Executive Officer (CEO) after a year long selection process. The ECX, which is struggling to meet targets, is choosing a bank executive for its leader for a second time.

The ECX was established in 2007 and commenced its trading operations in 2008. As a public-private enterprise partnership aiming to create a market infrastructure for framers to trade their agricultural products, mainly grains, and transforming the country’s agriculture into a market-oriented production. It is mainly trading cash crops, such as coffee and sesame, as well as other produce, including maize, wheat, pea beans and mung beans. The Ethiopian Commodity Exchange Authority (ECXA) is the mandated body regulating the ECX.

The ECX Board of Directors that has 11 members and chaired by Addisu Legesse, senior government official and former deputy prime minister of Ethiopia, had short -listed five candidates, which had been evaluated for the past six months, culminating with the choice of Ermias as its CEO.

Since its establishment, the ECX has had two CEOs, Eleni G. Medhin (PhD) and Anteneh Assefa. The latter resigned from his position and went to the United States (US) a year ago. The ECX has been run by its interim CEO Shimelis Habetewold since January 2014; Ermias will take the post starting from January 1, 2015.

Eleni, founder and the first CEO of the Exchange, resigned on September 30, 2012, following pressures for failing to attain targets, sources say. She was replaced by Anteneh, who was operations vice president at the Bank of Abyssinia (BoA). He attributed his resignation to medical reasons, but sources say he had frustrations with continuous problems at the ECX warehouses.

Ermias, the new CEO, has a BA Degree in Computation from the University of Manchester Institute of Science & Technology (UMIST), and obtained his Masters in International Business from the Manchester School of Management, both of which are in the United Kingdom. His CV indicates work experience at different management positions for the last 20 years, both locally and internationally, including at IBM, Alcatel, Orange and MicroStrategy. Recently he served as executive management member at Zemen Bank, and most recently as vice president, marketing and corporate services.

The ECX Board has decided that the interim CEO, Shemlis, who has served the Exchange for the last eight years in different positions, will continue his role in his former position of Chief Compliance Officer as of January 1, 2015.

The new CEO is capable for the position as he was working in the bank industry, which means he has a close relationship with the business community to help solve the problems that are observed at the ECX, says Tadelle Abreha, owner and general manager of Green Coffee Agro-Industry Plc, who has been working with the ECX since it was established.

There were reports that the ECX had been facing challenges in warehouse management, where the quality of produce traded on the floor would be different upon delivery than at the warehouse. Some warehouse workers are accused of removing high grade commodities from their sacks and replacing them with lower grade goods, with the sacks still displaying the high grade labels at the 60 warehouses of the ECX, located at 19 different sites. The ECX had to fire some people because of this.

To solve the problem, the Ministry of Trade (MoT) designed a directive for the establishment of an independent enterprise accountable to the ministry and responsible for managing the warehouses. The directive had sent to the Council of Ministers for approval. The separation will minimise the problems related to handling the processes, both at the trading floor and at warehouses, Kebede Chane, minister of Trade told Fortune on August 2014, while explaining the establishment of the new Exchange.

The previous management denied that problems existed at the warehouses, said Tadelle. They also communicated poorly with business people, he said, calling on Ermias to establish good communication with business people to avoid problems.

“I shall aim to ensure that the ECX remains relevant and continuous to deliver new innovations,’’ Ermias was quoted as saying in a press release from the ECX.

“Ermias should work on clearing the problems,” says Tadelle.

 

 


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