Eleni Gabre-Madhin has a short yet successful track record: in 2008, she and a small team in Ethiopia were tasked with the prodigious job of designing, building and eventually managing the Ethiopian Commodity Exchange.
The exchange was a resounding victory: in over five years of business – and trading around 250,000 tons of coffee each year – there have been no payment defaults, trading order errors, or system failures. Some 15 million coffee farmers have increased their share of the final price from 38% to 65%.
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Since then, Gabre-Madhin has become the CEO of her own turnkey company, which will focus on designing and building commodity exchanges in emerging and frontier markets.
The International Finance Corporation, Morgan Stanley and UK-based private equity firm 8 miles have all invested in her company, while Ghana, Nigeria and Mozambique have requested for her expertise to develop a commodity exchange of their own. With the potential to transform the agricultural landscape in Africa, Gabre-Madhin has been recognized as one of Euromoney’s Africa rising stars.
“I was doing my Master's degree in 1987 when I read a research paper about how there was actually a surplus of food in Ethiopia during the great famine of 1984 to 1985," says Gabre-Madhin.
"It came as a great shock that more than one million people in northern Ethiopia died while there was enough food produced in the western part of the country."
She adds: “I realized that people were almost exclusively focused on increasing food production as the key solution to improving food security and ending hunger.
"Of course, this is important, but we also need to consider grain distribution and the performance of the market as well. If the 1984 famine in Ethiopia showed us anything, it was this. This was a seminal moment for me.”
In 1993, Gabre-Madhin left a job at the UN to begin a PhD in Stanford University. It was there she came to the conclusion that a way out of the problem was through a commodities exchange.
After presenting her findings in 2002 to the then prime minister of Ethiopia, Meles Zenawi, Gabre-Madhin was invited back to Ethiopia from the US to put into practice her theory. She left behind her job at the World Bank in Washington and uprooted her family to move back to Ethiopia – a country she hadn’t lived in for almost 30 years.
“It was a big change," says Gabre-Madhin. "Friends and family told me in no uncertain terms that they thought I was crazy leaving the US for Ethiopia, but I had to take the chance. Even though I hadn’t lived there for so long, I definitely felt a deep attachment to Ethiopia.
"And it’s not every day an economist gets to put her ideas into practice.”