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Committee to Arrest Food Inflation Emerges


This comes after it was announced that food inflation has reached 18pc




A committee was formed in a bid to reduce the ever-growing food inflation. It was formed by experts, from trade and consumer protection bodies became operational as of February 9, 2018.

This one was formed by a high-level committee that was established by the Prime Minister’s Office back in November, composed of teams from the National Bank of Ethiopia (NBE), Ministry of Trade (MoT), Ministry of Industry, Trade Competition & Consumers Protection Authority (TCCPA). Part of the committee is made of regional trade bureaus.

This comes after food inflation has reached 18pc the last month, while headline inflation was at 13.4pc. The former had shown a decrease but remains at one of its highest points since the El Nino-induced draught, three years ago, according to the Central Statistical Agency (CSA).

The committee studies the sources of the shortages and inflation and proceeds to the next level which can range from issuing a written warning to suspending licenses and filing a legal suit.

“Although we were unable to take measures against businesses, as there was already scarcity of specific food items the past week, where agricultural goods could not enter the city, the team has been doing some preliminary work,” Echisa Dame, Director of Trade Information at the Authority told Fortune, concerning there challenges during the sit-in by residents of towns surrounding Addis Abeba.

One of the goods that showed a price surge the past week was red pepper. Although a kilogram of it fetched 40 Br to 50 Br, the food item surged by three-folds.

“We have been actively controlling a rise in prices and scarcity of food items,” Kassahun Beyene, Director of the Inspection & Regulatory Directorate at the Addis Abeba Trade Bureau, told Fortune.

The market stabilised thereafter when more than 100 trucks of red papers arrived at the capital from Gojam, inside the Amhara Regional State, mid last week, according to Kassahun.

“We are trying to control hoarders and trying to facilitate ways of satisfying the high demand caused by the fear of future scarcity,” said Kassahun, who also explains that the committee is also mandated to control the prices of subsidised food items such as sugar and oil, which could become pricier as a result of hoarding and artificial inflation.

The committee will submit weekly surveys to the higher one, chaired by Mekonnen Manyazewal, International Trade Negotiation Affairs adviser to the Prime Minister, every Monday.

The committee will launch investigations to take corrective measures against businesses in the brewery, soft drink, agro-processing and coffee markets, according to Kassahun.

The entire idea of solving inflation by means of more strict control is unreasonable to Atlaw Alemu (PhD), an economist with two decades of academic experience at the Addis Abeba Univesity (AAU). He believes that the main problem here is that there is too much money in the market but also little goods and services.

“Unless the government mobilises its efforts to tighten the money supply and increase the chain of supply, the current figures will not improve,” he said, adding that, “the government should cease printing cash to fill its temporary economic gaps”.

The headline inflation, when the higher-committee was set up against the backdrop of the devaluation of the Birr by 15pc against a basket of major currencies, was 13.2pc which is 0.2pc less than last month’s figure.

 

 



By HAIMANOT ASHENAFI
FORTUNE STAFF WRITER

Published on Feb 18,2018 [ Vol 18 ,No 930]


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