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Ethiopia’s skyrocketing cost of living, inflation impacting citizens

Ethiopia’s skyrocketing cost of living not just in the capital Addis Ababa but in different parts of the country has become a talking point among Ethiopians for a long time now. And it is not showing a sign of improvement.

Budget and Finance Standing Committee in the Ethiopian House of People’s Representative said on Wednesday that rising inflation is negatively impacting citizens and the country’s economy too.

The Minister for Finance, Ahmed Shide, cited the country’s statistics department and said that the inflation rate for food items was 15.6 percent in September while the rate for other commodities is 13.6 percent.  

The fix? He said implementing fiscal policies is a priority plan of action area so as to “stabilize prices.”  And what fiscal policy is the minister talking about?

Structural reforms in agencies accountable to the ministry and transferring state-owned “development” agencies to the private sector (privatization) are areas where the government is working on “carefully,” the minister added.

Government strategy in place to arrest soaring food prices, which has become unbearable for millions of citizens, is “purchasing 400 metric tonnes of wheat from abroad.”  Wheat is not a staple food for most Ethiopians.

Deputy chair of Budget and Finance Standing committee, Nafekush Dessie, has acknowledged the ministry’s coordination with the relevant departments to decrease the inflation rate during the first quarter of the fiscal year but she did not conceal that there is a limitation, on the part of the finance department apparently, in terms of the search for a durable solution for the rising price inflation.

Ethiopia’s Inflation rate for consumer goods hit 15 percent back in September 2019. Back then, the Ethiopian government admitted that rising inflation is partly a manufactured one related to an orchestrated shortage in the supply and illegal trade. Read more...

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