News / Africa

Ethiopia’s Inflation Rate Hits Nearly 15 Percent in December

Ethiopia's annual inflation rate soared to 14.5 percente in December, partially due to steep increases in food prices following a currency devaluation.  The government is hoping newly imposed price controls will ease consumer pressure.

Ethiopia's Central Statistical Agency Friday said inflation had jumped from 10.2 percent in November to 14.5 percent last month. A statement said non-food items had gone up nearly 23 percent while food prices increased by almost 9 percent.

The government devalued the local currency, the birr, by 17 percent against the dollar in September, significantly raising the price of imported goods. Ethiopia already had a significant trade imbalance, with $1.2 billion worth of exports against nearly $7 billion in imports in the most recent year.

Last week, the government announced price controls on more than a dozen essential consumer goods as costs on food skyrocketed.

The caps on prices of such items as bread, meat, sugar, beverages and edible oils have proved to be popular with consumers in a country where per capita income is less than $400 a year.  But they have sparked howls of protest from shopkeepers, who have seen their profit margins cut sharply.

Some business operators have complained they are being forced to sell products at less than what they paid for them.

News agencies this week reported the government has closed down more than 100 retailers and suppliers who raised prices of price-controlled goods. The reports say retailers could face heavy fines and imprisonment for repeated violations.

Economists and opposition politicians say price controls distort markets and have been repeatedly shown to be counterproductive wherever they have been tried. Retired Ethiopian lawmaker and former World Bank director Bulcha Demeksa says it is a mistake to blame the business community for the government's mistakes.

"I'm not so angry with the retailers, sellers," said Bulcha.  "I'm angry with the government, because the government counts on its capability to control price. Prices cannot be controlled. It has been tried everywhere in the world and it has failed. Unless you make it a totally totalitarian society it is impossible to control prices."

Consumers, however, are widely supportive of the price caps. Shopper Shenkut Teshome says average Ethiopians have seen their purchasing power shrink to the point where many people were having to cut back on food.

"It is very important that the government should do the price control. Otherwise, with the free economy everybody is raising his price, and nobody can buy with his money, and at the end there is nothing to buy, and that makes a big difference," said Shenkut.  "The economy of the country stops growing, and people has not much money so they can afford anything, and if you don't have any price control, at the end of the day the people will starve."

A trade ministry official this week told of plans to expand the price controls to other consumer goods. He noted that the government's recent five-year economic plan has set a target of holding the inflation rate down to six percent a year.

You May Like

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Video Afghan Economy Sinks As Troops Depart

Afghans are grappling with how exodus will affect country's fragile economy More

Video Scientists Say We Need Softer Robots

Today’s robots are mostly hard, rigid machines, with sharp edges and forceful movements, but researchers at Carnegie Mellon University say they should be softer and therefore safer More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs