In an ambitious attempt to grip the galloping inflation rates sweeping across commodity goods, the Addis Abeba City Administration is establishing a three billion Birr trading enterprise for the first time.

The two billion Birr paid-up capital was appropriated from the 144 billion Br budget of Addis Abeba for the year, according to officials who believe it will provide household commodities to middle and low-income residents by sourcing directly from plants and farmer cooperatives.

Mayor Adanech Abiebe is set to appoint a board to head the Enterprise following a regulation put forth by the Addis Abeba Trade Bureau two months ago that was approved by the City Cabinet.

Meles Tegenu, legal affairs head at the Bureau, indicated the current endeavour referenced experiences of the Ethiopian Trading Corporation and the Ethiopian Industrial Inputs Developments Enterprise (EIIDE) in bringing price stability.

"It is our duty to contain inflation," he told Fortune.

While board approval is pending, head of Trade Bureau Biniam Mikru told Fortune the enterprise will hold a profit margin to maintain consistent supply while the finance and trade bureaus will supervise all its activities.

"We are designing the structure," he told Fortune.

The Enterprise will mobilise funds by selling bonds and obtaining loans through the City Cabinet to find means of sourcing finance autonomously.

For Atlaw Alemu (Prof), an economist and researcher at Addis Abeba University, it is a matter of cart before the horse as a more 'practical' set is necessary for battling inflation instead of forming a trading enterprise.

He recommends tight fiscal and monetary policies to reduce the price surge across consumer goods.

"They are missing the priorities of inflation management," the economist told Fortune.

The National Bank of Ethiopia launched an inflation-targeting monetary policy in August that capped credit growth and direct advances to the central government. However, the price of household items has only seen an upward trajectory.