News Analysis | Sep 01,2024
Alem Tadesse, 28, bounced from one vendor to another, cradling her one-year-old son on her back. With one hand occupied by an umbrella to shield her family from the relentless sun, and the other gently patting down the chickens up for sale, Alem pleads with vendors to adjust their prices.
"I can't afford these," she said, in disappointment.
Sellers are unwilling to budge from a 650 Br price floor in the holiday market.
Alem, the sole provider for her family through intermittent work laundering clothes for neighbours, faces the daunting task of making ends meet with an income of 400 Br on her more prosperous days. Her desire to partake in the holiday market emanates from her wishes to bring joy to her five-year-old son, who eagerly anticipates the holiday season.
"I wouldn't have celebrated if it weren't for my family," she said.
While she plans to acquire additional condiments from her neighbours, Alem was hoping to buy a chicken for 500 Br, her budget cap. Soaring inflation and limited funds have not spared other buyers in the market.
The cost of chicken averages around 650 Br a fowl, occasionally reaching up to 1200 Br for varieties sourced from Welayta, Gojam, and Harrar – much in the same range as the prior holiday season four months ago.
Meseret Tarekegn, a poultry vendor, finds himself ensconced amid crowing roosters in a basket. He extracts one and offers it to prospective buyers while some deliberate on sizes and shapes, shocked by the prices. The buzzing noise of haggles does little to mitigate costs, as most buyers remain perplexed trying to reconcile the size of the chickens and their prices.
Despite the costs, Meseret remains optimistic about a buoyant festive season. Having succeeded in selling over 20 fowls since morning, he navigates through wrangling with every buyer over commodity prices.
Among the patrons waiting patiently as her chicken is sectioned with 50 Br is Meskerm Kebede. She purchased the 1,200 Br chicken although the price surpassed her budget cap by 400 Br.
"It's important for the holiday," Meskerem told Fortune.
Galloping inflation rates and disrupted supply chains do not seem to have had a significant impact on the vibrant Christmas market in Qera. The cattle trading area remains as lively as ever upon first glance, with the 60-year-old Girma Kebede peddling batons priced between 10 Br and 100 Br at the entrance.
Several men approached him, weighed the sticks, and fork payment. Although he initially stipulates the price, he willingly accepts the amount offered, reluctant to lose any customers.
"I won't return home with these sticks," he said, "I've to sell them no matter what."
While the area appears less congested than the previous holiday – bovines from Wellega town, Oromia Regional State were a no-show due to the closure of transportation routes. Oxen are fetching prices between 55,000 Br to 200,000 Br across the 13 Weredas in the Nifas Silk District, with the majority originating from Harar and Jimma towns.
Dejene Worku, 73, visited the site with hopes of acquiring a reasonably priced, well-fed bovine to divide among his seven neighbours with a 60,000 Br budget that was adjusted by 10,000 Br minutes upon arrival at the market.
"The price has gouged my wallet," he laments, showcasing the struggles faced by even the most prepared buyers.
Sheep appear to be lower on the priority list of holiday shoppers in the area as vendors call out to each passerby, hoping to strike a deal. The market lull has concerned veteran sheep vendor Tizazu Akemele as he inclines on his chair, shooing away flies that have targeted his forehead for a resting place.
"I've scarcely sold any sheep this holiday," he told Fortune.
The prices have experienced a marginal increase, ranging from 8,000 Br to 23,000 Br. Last holiday, it was fetching up to 14,000 Br which has failed to kindle a purchasing desire from urbanites.
The spice section a few kilometres away in the Merkato area has encountered a sluggish holiday atmosphere. Butter vendors like Mohammed Tamen have abandoned the hope of attracting buyers altogether.
"Nobody wants to spend money on butter anymore," he said.
A kilo (Lega Qibe) commands up to 800 Br for varieties imported from Debrebrhan, while Sheno Kibe from Gojam has reached 900 Br.
Mohammed points out that butter is predominantly sourced from the northern region with the recent logistical challenges fueling price hikes.
Prices have witnessed a considerable uptick from the previous holiday from cottage cheese and cardamom to honey. A kilogram of cardamom is vending for 400 Br, while honey fetches 800 Br, and cottage cheese is priced at 300 Br, signalling a slight increase from the previous holiday.
Shops that offer Christmas decorations seem to be faring a little better than the spice vendors as shoppers sift through trees, lights, and sparkling decorations with a little more festive energy.
Yodit Abebe enthusiastically showcases various decorations to prospective buyers, confident that the price wouldn't deter her customers. To her delight, most customers leaving her shop pay the price she asks for.
Christmas tree decorators are garnering the most sales, with a box of Christmas decorations priced from 1,000 Br to 43,000 Br. Lights fetch 400 Br, the same as heart-shaped gift boxes, while hats are available for 80 Br. Yodit plans to clear out stocks left over from last year, which prompted her to reduce prices by 20pc.
Food inflation has been on a sharp, unmitigated rise over the past year despite general inflation rates reducing to 27pc last month. The Addis Abeba Trade Bureau responded by inaugurating new Sunday markets.
According to Sewnet Ayele, communication director at the Bureau, the distribution of 122,900 chickens, 1,324 bovines, and 138qtl of onions has helped stabilise the city's markets. The Trade Bureau has opened seven bazaar sites and 179 Sunday markets, along with the operation of two newly inaugurated market centres across Addis Abeba to keep the price increment at bay.
"There is enough supply," he said.
Under the supervision of the City Administration, 11 cooperative unions are also part of the plan to "stabilise" the market distribution through the 152 consumer association shops under their wing. The cooperative unions have not brought any onions for distribution due to supply shortages and inflated prices.
"We couldn't afford onions at this time," said Dagne Abebaw, general manager, outlining the practical difficulties faced by the unions in accessing essential goods.
Fisshea Yitagesu, the newly crowned state minister for trade and regional integration, indicated that prices could only be stable by bringing in enough supply and bridging the gap in price escalations during a press briefing at the Ministry's headquarters.
"We can only bring down price hikes through enough supplies," he states. "We cannot set prices in a free economy."
However, the efforts of city and federal agencies have done little to abate the price of the most essential commodity for the holiday – an onion. A kilo has reached an astonishing 140 Br, casting a tragedy on consumers who have already been facing pinching economic challenges.
Plummeting production in Meki, Oromia Regional State, and other high-producing areas led to the price increment.
"Price is unlikely to come down anytime soon," she told Fortune.
Amid these skyrocketing prices, Purpose Black, a two-year-old company, has presented itself as a saving grace with a solution bundling five kilos of onions with an assortment of other holiday goods priced between 1,500 Br to 1800 Br. People lined up at the gates of the branches of the Ke-geberew market last week, looking to take advantage of the holiday package.
Belay Abegaz, a retailer at one of the branches in the Lafto area, confidently said the deals offered here are much better than those offered in the market.
"We're giving the people what they need," he told Fortune.
Economists like Arega Shumete (PhD) point to exogenic barriers internationally, the low purchasing power of Birr, and the expanding disparity between demand as primary causes for inflation. He highlighted the systemic issues that contribute to the economic challenges faced by the public.
"High levels of corruption have undermined any attempts to combat inflation," he said.
Arega reasons that vague economic policy, which neither rests on free market economy principles nor is backed by strong state intervention in the economy, has broken the commodity supply chain. He recommends sticking to macroeconomic fundamentals in strict monetary policy and limited expenditures as potential remedies despite some causes of the inflationary surge being structural.
PUBLISHED ON
Jan 07,2024 [ VOL
24 , NO
1236]
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