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The Addis Ababa city administration said the recent inflationary pressure in the capital is the result of political sabotage carried out by groups trying to make up for their political loss using economic gains.
Without mentioning those allegedly involved in political sabotage, the Administration accused them of taking advantage of their economic hegemony to destroy their political objectives.
“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 merchants involved in hoarding practices. After conducting a door-to-door evaluation at 367,458 businesses and 1,551 warehouses, he delivered a warning letter to 18,455 merchants involved in malpractice.
The Administration also seized USD 112,000 and Rand 8700 while writing a surprise check at 366 businesses. Additionally, in an attempt to address supply gap issues, it is processing a Birr 500 million revolving fund for cooperatives that would provide food at an affordable price. According to the Administration, efforts are also being made to increase the supply of edible oil.
The cost of living has skyrocketed in the past two months, although the food inflation rate has been above 21 percent for nearly a year, which many experts say is the result of gap issues. supply driven by the shortage of foreign exchange in the country.
It was further boosted by the recent fuel price adjustment, which has increased by more than 20 percent since November 2020. The increase comes after the government decided to reduce its fuel price subsidy.
“The increase in fuel prices, while the right action, was implemented at the wrong time,” said Demis Chanyalew (PhD), economist. He added: “Given the already rising price of goods, the adjustment should have been implemented later.”
On the other hand, another economist, Amin Abdella (PhD) recommended that the government stabilize the market by acting as a buyer during times of surplus and as a seller when there is a shortage. “Such a measure would have a great impact on stabilizing the market when there is a large increase in the price of some items due to the drop in supply,” he said.
