April 30 , 2022
The Ethiopian Economic Association (EEA) has proposed the formation of a 'supply and price stabilisation board' to rein in galloping inflation. A study it conducted reveals that supply shortages, unstable economic governance, increased import trade tariffs, political instability, and armed conflict have been the main contributors to the skyrocketing cost of living. Headline inflation in March registered at 34.7pc, the eighth consecutive months above the 30pc mark, according to the Ethiopian Statistics Service. Food inflation clocked in at a staggering 43.4pc, the highest recorded in over a decade. The Russian invasion of Ukraine is expected to exacerbate the economic downturn brought on by the effects of the COVID-19 pandemic and the armed conflict in the country's north as prices for fertiliser, cooking oil and fuel rise. The study indicates that declining productivity and inconsiderate bank interest rates on deposits are part of the equation as well. The Association is urging federal officials to consider allowing the import of pharmaceuticals, as well as selected construction, agricultural and industrial inputs, through Franco Valuta in addition to the basic food items the Ministry of Finance approved for the import scheme recently.
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