Eleni Gabre-Madhin, First CEO of the Ethiopian Commodity Exchange, Launches Eleni LLC, with Morgan Stanley and the International Finance Corporation Investments

By Dawit Taye
Jan. 26, 2013

Africa Commodity Exchange Pioneer Goes Private

With a considerable equity contribution from Morgan Stanley and the International Finance Corporation (IFC), Eleni Gabre-Madhin, first CEO of the Ethiopian Commodity Exchange, announced the formation of a private company- Eleni LLC- that specializes in incubation of new exchange markets in Africa and Asia.

Eleni together with two co-founders, Keith Thomas and Jawad Ali, recently launched the new company, which will be based in Nairobi. Eleni LLC was founded at a capital of 7.5 million dollars, of which Morgan Stanly contributed the lion’s share, 5 million, followed by IFC, which invested the rest. However, another financier ‘The 8 Mile Fund’ has been rumored to have made the commitment to join the other two in financing shortly.

This is the time for Africa to get the benefit from its agricultural sector, Eleni. saysAnd commodity exchanges are ideal in maximizing the gains from this sector. In a press release dispatched mid-week, Eleni said there is no-better time to capitalize on agriculture commodity markets in Africa, since only a quarter of the overall potential in the sector has been exploited so far.

The new company would take the lead in establishing commodity markets in the continent and providing the needed technical support for the smooth operation of these newborn markets. To begin with, Eleni LLC will take on various African markets as their first assignment, while some Asian countries will also be in the market radar of this company.

According to the CEO, the business model of commodity marketing in Africa should be on the basis of public-private partnerships, explained Eleni, and the fact that she decided to go private is influenced by this strong belief.

About Eleni Zaude Gabre-Madhin: (from Wikipedia)
Eleni Zaude Gabre-Madhin is an Ethiopian economist and a former Chief Executive Officer of the Ethiopia Commodity Exchange (ECX). She has had many years of experience working on agricultural markets – particularly in Sub-Saharan Africa – and has held senior positions in the World Bank, the International Food Policy Research Institute (Washington), and United Nations (Geneva). She has a PhD in Applied Economics from Stanford University, and Bachelors and Masters degrees in Economics from Cornell University and Michigan State University respectively.[1] Dr. Eleni was selected as “Ethiopian Person of the Year” for the 2002 ET calendar year (2009/2010 Gregorian) by the Ethiopian newspaper Jimma Times.  [2]

Eleni at the Ethiopia Commodity Exchange (ECX).
Born Ethiopian
Nationality Ethiopian
Education Cornell University (BS)
Michigan State University (Masters)
Stanford University (PhD in Applied Economics)

She was the main driving force behind the development of the Ethiopia Commodity Exchange (ECX). Whilst working as a researcher for the International Food Policy Research Institute (IFPRI) she examined agricultural markets for many years and noticed, as had many others, that whilst in some years or regions there were severe shortages or droughts in others there were surpluses or bumper harvests. Specifically in her survey of grain traders in 2002, she found that a key factor was the lack of effective infrastructure and services needed for grain markets to function properly. Traders often failed to have access to sufficient credit, information about the market, transportation and other vital resources and contract compliance was difficult to enforce.

In 2004 she moved home from the US to lead an IFPRI program to improve Ethiopia’s agricultural policies and markets. Specifically she undertook the important role of coordinating the advisory body developing the ECX. In 2010 (2002 ET calendar), Dr. Eleni was given the “Ethiopian Person of the Year” honor for the 2002 Ethiopian year.[3]

Eleni, who served as CEO of the new exchange, argued that “(W)hen farmers can sell their crops on the open market and get a fair price, they will have much more incentive to be productive, and Ethiopia will be much less prone to food crises” …. and that the “ECX will allow farmers and traders to link to the global economy, propelling Ethiopian agriculture forward to a whole new level.”[4]

For more info on Eleni Gabre-Madhin, click here and here.

Related Post:

Morgan Stanley, IFC Invests $7.5 million To Boost Food Security

January 22, 2013 — VENTURES AFRICA – Eleni LLC, a newly formed company led by CEO Dr. Eleni Gabre-Madhin, announced today that Morgan Stanley andInternational Finance Corporation (IFC) have both agreed to make an equity investment totalling about $7.5 million in the Kenya-based company which will incubate and support the formation of agricultural commodity exchanges across Africa, helping to promote food security.

Global financial services firm Morgan Stanley has raised $5 million in funding for the investment while IFC, the largest global development institution focused exclusively on the private sector, is to invest up to $2.5 million.

“I cannot think of a better time to develop this business in Africa. Africa is the world’s last frontier for agriculture, with only one quarter of its yield potential achieved and seventy percent of its farmland as yet unused”, said Dr. Eleni Gabre-Madhin founder Eleni LLC

Commenting on the deal, the Managing Director of Morgan Stanley Mr. Gary Offner the company is “pleased to join with IFC in supporting eleni and its vision of improving transparency and liquidity in agricultural markets in the developing world, where food security is often a pressing concern.”

According to Georgina Baker, Director Trade and Supply Chain IFC, the investment will enhance productivity and risk management while making finance more accessible for farmers and helping them to increase their share of profit and get paid more quickly.

Beyond the initial funding, each country or regional exchange project will involve the formation of a private investor consortium. Eleni aims to rollout exchanges progressively across Africa and elsewhere in the coming years.

It is also anticipated that a third investor, the 8 Miles Fund, an Africa-focused private equity fund, will join the investment round within a month, together with envisaged support from the African Development Bank.

Building on the success of the highly acclaimed Ethiopia Commodity Exchange (ECX), which she founded and managed from 2008 to late 2012, Gabre-Madhin and co-founders Mr. Keith Thomas and Mr. Jawad Ali have recently launched eleni, which is positioned to be the industry leader in designing, building, and supporting the operations of commodity exchange eco-systems in frontier markets.

The Company’s business model is based on delivering turnkey projects on a Public-Private Partnership (“PPP”) basis, combining private investment with the best of know-how, technology and management, to support exchange projects. The Company expects to launch several such projects in 2013.

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Source: Ventures Africa