ZAMACE urges State to implement Credit Act

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THE Zambia Agricultural Commodities Exchange (ZAMACE) Limited has urged the government to implement the Agricultural Credits Act Number 35 of 2010 to speed up the development of the commodity exchange and ability to guarantee delivery.

The Act repealed the Agricultural Credits Act of 1995 and introduced a legal

framework for the operation of the warehouse receipt system in Zambia.

The financial sector demanded for the law to categorically recognise a warehouse receipt as a document of title and the process through which it was created. Act No. 35 of 2010 addressed all the issues and became law at the end of 2010.

ZAMACE executive director Brian Tembo said that it is now the third year of an unimplemented Act.

Mr Tembo said in a statement released in Lusaka yesterday.

He said once implemented, the Act which is a key market value-addition by an exchange will guarantee transactions on the exchange.

ZAMACE has developed a system through which a seller has to provide a warehouse receipt before they can place a “sell” order on the exchange.

“The lack of implementation of the Agricultural Credits Act therefore directly affects the development of the commodity exchange and in particular its ability to guarantee delivery,” he said.

He said the Act provides a framework through which the storage industry is regulated for purposes of creation and issuance of warehouse receipts.

A warehouse receipt which is a document which proves title to and deposit of a specific quantity and quality of a stored commodity in a specific certified storage location, can also be used by the holder to access financing against the deposited commodity from a financial institution.

The certified storage operator is a private entity which invests in and professionally manages grain storage and will store the commodity at known storage and handling fees.

He also said the farmer and the market in general will benefit from this through increased investment in storage nationwide especially that the government has embarked on the Link Zambia 8000 initiative.

“The burden on the government finding additional resources to invest in storage infrastructure will also be reduced,” he said