Capital Ethiopia Newspaper

Gov’t spends over 2 billion birr to stabilize market

In face of rampant inflation that recently angered teachers to the point that they went on strike demanding pay raises, the federal government says it has spent more than two billion birr to subsidize costs of various commodities.
A report by the Trade Ministry submitted to parliament on Tuesday says the federal government has spent over 2.1 billion birr to help ease soaring prices of various commodities during the first six months of the budget year that started on July, 8.
“This is part of a broader effort to clam the market and mitigate its burden on consumers,” Trade Minister Kebede Chane told MPs at Tuesday’s parliamentary session.
The country’s annual inflation during February soared to 36.3 percent, up from 32 percent in January reversing a consistent, five month long trend of decelerating prices.
The escalation in prices during February was driven by surging costs of food items.  Prices climbed to 47.4 percent in February, up from 41.4 percent a month earlier. Non food items also accelerated to 21.4 percent, a rise from January’s 19.2 percent.
On top of hyper inflated period, consumers were further confronted by the absence of various commodities including edible oil, sugar and wheat.
The Trade Ministry says the major factor behind the apparent scarcity of food items in the market is not due to shortage of supply but glitches in a chain of distribution being manipulated by ‘greedy businessmen.’
The Trade Minister Kebede Chane, who took office earlier this year after his predecessor was removed from the post after proving ineffective in regulating the increasingly volatile market, is vowing  to take severe measures against  people caught engaging  in obstructing the fair distribution of food stuffs.
His six month performance report presented to lawmaker says the feds imported and distributed three million quintals of wheat through the Ethiopian Grain Marketing Enterprise.
Over five million quintals of wheat is in the pipes, all to be offered to the local market and flour market in an effort to convince the local market there is no shortage of supply.
Half of the imported 2.5 million quintals of sugar has been already offered while the remaining is in the process of being disseminated across the board, the report said.
Kebede said over 1.25 million liters of edible has been distributed during the six months.
The minister insists that as the law enforcing capacity of the ministry grows, the market will see a smooth transaction of commodities, putting illegally profiting businesses to the side.