The Bank of Tanzania (BoT) plans to review the current warehouse receipt systems (WRS) and recommend on linkage between it and the proposed commodity exchange.
Already the BoT has announced request for expression of interests for consultants, who will carry out the job later this year. It is expected that the review is scheduled to start in the coming financial year.
The objective of the consultancy is to conduct a situational analysis and recommend linkages between the warehouse receipt system and the central depository trading platform by doing some assignments.
Some of the activities to be carried by the consultant include establishing the status of WRS in the five regions of Kilimanjaro, Mtwara , Lindi , Shinyanga and Mbeya and compare it with similar foreign crop programmes.
The consultancy would also be required to propose options that could be employed to enhance WRS throughout the country to go in tandem with the development of commodity exchange.
Other takes are to identify constraints and problems in locations such as Mtwara and Lindi and recommend measures in support of its implementation.
The advisor will also be required to establish a weighing and grading system to fairly document, evaluate and certify product quality and quantities against commonly agreed upon standards.
Besides, they will be required to assess technical, physical and financial requirements and gaps for WRS and devise plans and address gaps in each area.
According to the BoT, other assignments include to review and devise structure of how accredited warehouses will be linked with the exchange central depository system.
Experts however say that the warehouse receipt payment system has significantly raised commodity export volume and value.
It was reported that in 2007 the export volume for cashew nuts went up to 36,639 tonnes compared to 21,806 tonnes in 2006.
In another development, late last year the government announced to form a task force to oversee the operation of the long awaited Tanzania Commodity Exchange.
According to the Deputy Permanent Secretary in Industry and Trade ministry, Dr Shaaban Mwinjaka, the task force will ensure that initial preparations of the exchange are done.
He suggested that the secretariat should include officials from the ministries of Agriculture, Food Security and Cooperatives, Finance, Industry and Trade, and the Capital Markets and Securities Authority (CMSA), and the Attorney General’s Office.
The establishment of the exchange arises from the fact that agriculture is still one of the most important sectors contributing about 26 percent of the GDP and 75 percent of the rural livelihood’s income.
The sector contributes 30 percent of total exports and 65 percent of the raw materials requirements for the country.