Tuesday, February 27, 2024
BusinessCity Admin’ blames political sabotage for recent inflationary pressure

City Admin’ blames political sabotage for recent inflationary pressure

The Addis Ababa City Administration said the recent inflationary pressure in the capital is the result of a political sabotage carried out by groups attempting to offset their political loss using economic gains.

While failing to mention those allegedly involved in the political sabotage, the Administration accused them of taking an advantage of their economic hegemony to end their political goals.

“Using their dominance over supply chains, some groups are trying to prevent items from reaching the market just to satisfy their political needs,” said Adanech Abebie, Deputy Mayor of the City Administration.  

The City Administration took different measures on traders involved in hoarding practices. After making a door to door assessment on 367,458 businesses and 1551 warehouses, it gave a warning letter to 18,455 traders involved in malpractices.

The Administration also confiscated USD 112,000 and Rand 8700 while making a surprise check on 366 businesses. Additionally, in a bid to address supply gap problems, it is processing a 500 million Birr revolving fund to cooperatives that would supply food items at an affordable rate. According to the Administration, efforts are also underway to increase the supply of edible oil.  

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Cost of living has been drastically ballooning over the last two months, although food inflation rate has been above 21 percent for almost a year, which many experts said is the result of supply gap problems driven by the foreign currency shortage in the country.

It was further fueled by the recent adjustment of the price of fuel, which has increased by more than 20 percent since November 2020. The increase comes after the government decided to reduce its subsidy on the price of fuel.

“The increase in price of fuel, although is a right action, was implemented at a wrong time,” said Demis Chanyalew (PhD), an economist. He added “Considering the already rising price of goods, the adjustment should have been put in place later.”

On the other hand, another economist, Amin Abdella (PhD) recommended the government stabilize the market by acting as a buyer during surplus times and as a seller when there is shortage. “Such a measure would have a big impact in stabilizing the market when there is a huge increase in the price of some items due to fall in supply,” he said.

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Video from Enat Bank Youtube Channel.


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